Executive Commentary
As prepared for delivery

CEO Vikram Pandit: CFED Award Acceptance Speech

Vikram Pandit, CEO, Citigroup
Washington, D.C.

September 23, 2010

Thank you, Fred.

And thanks to everyone at the Corporation for Enterprise Development for the incredible work you do. You create opportunity by helping millions of Americans start and grow businesses, go to college, buy a home and save for their families' futures.

On behalf of my 260,000 Citi colleagues around the world, I thank you for this wonderful award. Their dedication and excellence earned this honor for our company. Not only are Citi employees great bankers, they are great community bankers. I've visited many of our communities, and our bankers take great pride not just in their work … but also in devoting their time, effort and money to improve the communities they serve and in which they live.

As President Obama has said, "Ultimately, there is no dividing line between Main Street and Wall Street. We will rise or we will fall together as one nation."1

Banks are an integral part of every economy and every society. And their role is not merely to further people's material well-being—though that is vitally important. The value of banks runs deeper. Human rights and democracy reach their full potential only where there is economic inclusion for all. That in turn requires financial inclusion—access to basic financial products and services that everyone in this room, and people in every advanced society, take for granted. Financial inclusion—that is our cause.

At Citi, we approach it in a certain way. "Responsible Finance" is the unifying idea upon which we have rebuilt and reorganized our bank in the wake of the financial crisis. It has three key pillars:

  1. First, responsibility to customers
  2. Second, responsibility to the financial system
  3. And third, responsibility to the broader community

Before we enter into any transaction, we ask ourselves three questions: Is it in the best interest of our customer? Is it systemically responsible? And does this create economic value?

The answer to each must be "yes."

From innovative foreclosure prevention programs that have kept nearly one million Americans in their homes to a new, disciplined approach to risk management, Responsible Finance is being engrained throughout Citi's practices and culture.

Responsible Finance is partly about the bottom line. No one wants to see another crisis. Also, our shareholders expect—and have every right to expect—the company to be profitable and well-managed. But it's also about our responsibilities to the communities we serve. We know something about finance and development. It's a natural fit for us to put our money, talent, experience and products to work in communities where access to financial services is limited, and to strive to include more people in the financial system.

I'd like to share an example—the Communities at Work Fund. Everyone knows that lower-income neighborhoods and small businesses are often the ones hardest hit during a recession. Financial institutions such as Citi can play an important role in catalyzing economic opportunity. We issue credit through traditional loans from our branches. We support worthy and effective community-based organizations.

But we wanted to do more to extend our reach into the most under-served neighborhoods to provide capital to businesses, charter schools and other community organizations. Our first step was to call upon Citi's experts in microfinance and community finance, who identified two leading non-profit partners, Calvert Foundation and Opportunity Finance Network. We then worked collaboratively to develop the Fund. At $200 million, it's one of the country's largest vehicles for connecting private capital with underserved communities. We leveraged Citi's financing capital and expertise to create a sustainable—and ultimately profitable—social enterprise.

This is one of our more recent efforts, but there are many more.

Citi and Grameen America developed a savings program that provides more than 2,500 micro-entrepreneurs with access – some for the first time – to easy-to-use accounts. We are proud to help these consumers invest in their families and futures, and create an economic safety net through savings.

It's no secret that a college degree is a key to lifetime success. But the rising cost of private and public education is making it increasingly difficult for our youth—especially those from low- and middle-income backgrounds—to afford the education they deserve. In fact, less than 10% of students from low-income families graduate from college by their mid-20s.

To address this problem, earlier this year Citi committed $7.5 million to a joint effort with CFED, the United Negro College Fund and the Knowledge is Power Program network of charter schools. Together we are working to provide a package of financial products and services tailored to the specific needs of low-income households. Our goal is to help families overcome the financial barriers that keep so many talented kids from fulfilling their potential. We are also trying to bring the underserved into the financial mainstream and improve financial education in low-income communities.

It's impossible to overstate the importance of financial education. In many ways, how people manage their money is more important than how much they have. One contributing factor to the financial crisis was that too many people didn't understand how best to secure their financial futures. That's a skill that can be learned—and that is vital no matter how big or small your bank balance.

In the wake of the crisis, the financial services industry has reevaluated the way we do business and the values that drive us. Indeed, the crisis illustrated the need for banks to focus on their essential role in society: to help customers save, invest, spend, borrow and protect their money with trust and confidence … and to help enterprises by committing capital.

At Citi, creating financial opportunity for everyone is at the core of our mission. We are committed to putting the full force of our people and resources to work to drive financial inclusion. Achieving that mission means incorporating it into everything we do, and into every relationship we build. Our relationship with CFED is one of our most important, and I want to thank your leadership and all those who support you.

Finally, I thank all of you in this room for the work you do. Together we will help provide more Americans than ever with the financial tools they need to create a better future for themselves, their families and their communities.

Thank you.