Pandit Recruits Citigroup Army as Costs Erode U.S. Bank Margins

Citigroup Inc. and U.S. banks that hunkered down following 2008 bailouts are expanding into new businesses and markets, bringing higher expenses that may erode profit margins before they yield shareholder returns.

Citigroup Chief Executive Officer Vikram Pandit is adding 7,500 staff in China over the next three years. He also plans to recruit 100 commodities traders and double private bankers in North America to almost 260. The company last month promised $9 million to a Houston-based investment banker to lure him from UBS AG, according to a person with knowledge of the matter.