In what may be a step toward severing relations between Citigroup and Visa, Citi co-CEO John Reed is quitting the U.S. and international boards of the credit-card association. Citi, the top card issuer, could wind up only putting out cards with the MasterCard logo.
The move is part of a long battle by Reed to establish Citi as a brand name, an effort he feels has been frustrated by Visa's aggressive marketing. "It goes back quite a ways," says David Berry, research director at investment bank Keefe, Bruyette & Woods. "John Reed has the view that Citi will be another great four-letter word like Nike or Coke." Citi accounts for nearly 17% of all Visa and MasterCard business, says the Nilson Report. Reed's goal: to put card associations' names on the back of the plastic and keep Citi's on the front.
Reed's role in credit-card policy belies talk that he will play a smaller part at Citigroup, the behemoth created by the '98 Citicorp-Travelers merger. "John has been very involved," says Berry. "Any presumption to the contrary is silly."