At least in Baltimore, Citigroup only had to look up the street to find its latest acquisition.
Citigroup on Monday agreed to purchase the Charlotte, N.C.-based Wachovia Corp.’s banking operations for $2.1 billion in a deal arranged by federal regulators. The move greatly expands Citi’s retail banking division, adding $600 billion in deposits and more than 3,300 U.S. branches including approximately 60 around the Baltimore area.
Wachovia’s most prominent local branch is on St. Paul Street in downtown Baltimore, not far from a Citibank branch in the William Donald Schaefer building.
“Clearly those are the kinds of situations that have to be looked at,” said Barb Nate, Wachovia’s regional spokeswoman. “But for the most part I would say Citi and Wachovia had have complementary footprints, we have a presence in many places they do not.”
Nate said Citi currently has about 1,000 retail banking locations, meaning the acquisition would triple their presence in the national market and place them alongside giants Bank of America Corp. and JPMorgan Chase and Co.
Wachovia is a major presence in the Baltimore market, along with M&T Bank and Bank of America, said August “Augie” Chiasera, M&T’s president of the Greater Baltimore region.
“They have probably the third-biggest market share here in Baltimore,” Chiasera said. “That said, there are 8,000 banks in the banking industry, so some consolidation shouldn’t have that big an effect globally.”
Citigroup insisted Tuesday that it remains committed to its acquisition of Wachovia, as the failure of the government’s financial rescue plan cast doubt on the bank’s willingness to close the deal.
“In isolation, we like the deal,” said analyst David Trone of New York and Chicago-based Fox-Pitt Kelton, but with the failure of the bailout plan, “we are concerned about the macro consequences to Citi and its peers at a time when the global financial system is suffering from a severe decline in confidence.”
