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00:00Hello I'm David Rubenstein. I'm here today with Michael Corbett who has for the last eight years been the CEO of Citicorp. Michael thank you very much for coming in. Thanks for having me. So let's start today with a discussion of some news that's coming out of Washington. In the last couple of days the president elect has announced his economic team. It appears that Janet Yellen will be nominated by him as the new secretary of the treasury. I assume you've worked with her over the years. Do you have any comment on her becoming the secretary of treasury. Well we have we we've worked with with the chair formerly Chair Yellen Janet. You know through her time at the Fed. And I would say that not just shitty but I think the banking industry had a good relationship with her. And you know if she is elected into two or if she is voted into the seat I think she'll do a great job. And I would expect that relationship to continue. And I'd also you know shout out another glass ceiling broken in terms of her then becoming the first female secretary of treasury which would be another great one for the both. Well so far the entire economic team seems to be female which is a good way to break the glass ceiling the president elect has announced that C.C. Rouse is likely to be the head of the Council of Economic Advisers and Neera Tanden is likely to be the head of OMB. All these are subject confirmation. So you have any comment on the entire economic team he's put together. He's trying to put together the best team that he can. His choices so far seem like seem like very good ones. And there's certainly more to go. Filling seats as you say on a daily basis. And I think it's exciting to watch. And and I'm sure he'll do his best to put the right team and put the right team on the field. Let's talk about the economy for a moment. Are there many people in Washington and around the country who thinks they think the economy could use another stimulus bill. We couldn't get one so far before the election but maybe in the lame duck there might be one. And maybe in the early new Congress you have a view that the economy needs a stimulus bill to be on a go forward until we get all the vaccines distributed and widely used. I think as you point out David it's unclear whether we're going to get that new stimulus package between now or late January. But I think if we don't get something done right now I think we will get something done and probably fairly early 2021. And I think the question is not going to be the if. But I think it's going to be more about the size and what can get get passed. And I think that will be largely determined by the outcome of the Senate races in Georgia. I think right now with Kobe 19 cases on the rise additional stimulus through unemployment checks BPP loans rebates are all helpful tools to both to bolster the economy and while also helping individuals to recover from the economic hardship of the pandemic experience. And what we know right. Is that while we're all in the same storm we're not all in the same boat. And I think if we can get these moneys targeted at those most affected I think it would it would be a very good thing in terms of helping restore the economy otherwise quicker than it would. Let's talk about the meaning of let's say we have a stimulus bill. Some people have said well we could use a stimulus bill. On the other hand we can't ignore the fact that the debt is rising quite rapidly. We have about twenty seven trillion dollars of federal debt and we're having a budget deficit now about three point two or three point three trillion dollars a year or borrowing about half the money that we spend each year. How much longer can we keep borrowing this money without people on Wall Street or people in the general economy saying this is too much borrowing. Are you worried about that. I think we all should be worried about it. I think we've you know we've been talking about deficits for a number of years and what is sustainable. I think the consequence and the prospect of lower for longer in terms of interest rates obviously significantly reduces your holds down that borrowing costs. But we can't believe that rates are going to stay necessarily where they are forever. So we've got to be mindful. And that's why I believe that it's actually very important that we're targeted in terms of getting the moneys to those that are really indeed because we know that the longer this goes on and the more small business the more individuals certain geographies neighborhoods get affected. It just makes the come back from that much more difficult. And I think we've seen that and that's been proven from a historic perspective. Let's talk about Kolbert in managing a bank your bank and during the. So when it hit let's say around February or March of earlier this year you were minding your own business ISE back running your bank. All of a sudden you realize people are getting sick and and we have a virus. When did you say to your employees work from home and how did you do that when you have a global organization that you do it just in the United States. Or how did you tell people to work from home and work remotely. So what we do have a benefit as being a global company. We come to work in about 100 countries every day and we have about and are on the ground and have been in Asia for a while. And so we did see firsthand whether it was in China or other parts of Asia. The early impacts of the virus. And so as the virus made its way west we were able to take our learnings and to employ them pretty quickly. And actually the first actions that we began to take were probably right around the first of February. And and by obviously the middle of March we had largely moved the bank towards a remote a remote process. As part of that 200 year old institution. We've lived through many challenges none quite like this one. And I would say that the learnings that we had the some of the investments that we made along the way allowed us that flexibility to in fact get our. People out of congregated workspace get them to remote workspaces and you know at our peak of our two hundred thousand employees around the world we've had simultaneous over one hundred and fifty thousand of those in our systems online and working and being able to support our customers and clients which I think it's truly been extraordinary. And I think in many ways we surprised ourselves in terms of our ability to continue on the way we have. And did you yourself work remotely and where you're running the bank remotely from your house or were you going into the office. I did. I stayed in the office till about the 1st of April. And then with all the lockdowns and obviously people working remotely I did work remotely. I came back again to the office on a full time basis or largely full time basis probably around the first or second week of September. And again kind of trying to to watch the different different pieces. But you know for that time period you know mainly mainly in the office. So as we go through a new virus resurgence it appears I do expect that we'll have to have more people working remotely. And there were those who came back to the offices like you might have to go back to working remotely or do you think it's not necessary now. Well I think we'd better watch it. What we've said all along David is that we're not going to be driven by dates. We're gonna be driven by data. And I think as in whether it's been in Asia whether it's in Europe or in the US we've seen the back and forth where we've brought people in to send him back home. And we're not afraid to do that. And again I think we've been successful in terms of our ability to work remotely. We absolutely like to have our people in when we can have it but we're not going to put him at risk. And so I think we've tried to get people back in where we can but where the cases have come back up and date has been going the wrong way. We haven't been shy about sending those people back home. And so I think we've got to stay flexible. Let's talk about the situation with respect to layoffs. You have about two hundred thousand employees. I think you committed that you wouldn't have layoffs for a certain period of time presumably not indefinitely. What is your view going forward. Well you have to lay off people for some reasons or you think you can go through with your existing employee base pretty much intact. Well we did. We did in the early part of of the cold virus say that we were going to be mindful and we would stay away from layoffs. And we in fact did you know throughout that period of time. David you know we hired tens of thousands of employees into our firm. We kept on with normal hiring practices. And I think as technology and as business and as customer and client preferences continued drove up. It's impossible to say that you're not going to continue to be changing your workforce to make sure that you're meeting meeting those demands and that you're you're you're staying competitive with that. So again we have begun some layoffs. I think they've been fairly small in terms of the things that we've we've been doing. And again I think our people have performed and worked remotely very well. And again you know kind of mindful on both sides and making sure we're continuing to bring the right people in. But at the same time that our business structure remains competitive now many CEOs of large companies like yours are beginning to wonder whether they need all the office space they currently have because employees when they come back might only want to come back in the office two or three days a week. And some people might decide that they need to resize their buildings and so forth. You expect you'll need all the real estate you have now in the future. The answer is probably not. But I would say in my own belief it's too early to declare that meaning that our business the banking business many businesses are apprenticeship businesses and that we've learned our craft by physically being together and those experiences being passed down. I think that's an important part of big parts of our business. And we don't know how that age is. We don't know over time what remote working what the ramifications are. We know some of the benefits. People talk about the productivity that comes working remotely. Well if I work seven days a week you know 15 16 hours a day I don't take any holidays at least for a period of time I'm going to be more productive. But I think there's two access to that chart. One is certainly the productivity measured over longer periods of time. But I also think the other piece is creativity. And what I'm mindful of is I don't want to wake up as a as a as a company. I don't want to wake up as an industry and have hollowed our skill sets out around moving too quickly towards towards remote. And I also think the other piece that's important is people join companies for their culture for the people. And I think it's important that we keep that in mind. So I'm sure we will. We've begun and we will absolutely continue to accelerate the move towards digital and where appropriate more remote. But I wouldn't certainly want to see us move too quickly. So when you started in the business world and when I started the business were a little before you people had offices and they measure their success by the size of their office to some extent. More recently people been saying let's have open office architecture where you don't have offices. And I think city built out some of those you expect in the future. You'll now have to change that because you need to have dividers between everybody or because of that of the virus or you're not sure yet. Well we've we. So so one is we have moved to towards a more open architecture. But I think actually one of the things that we've seen through this David is actually that space giving us flexibility. So as opposed to dedicated offices we can create neighborhoods we can create work spaces we can create workstations for people that they can come and go from. And they don't necessarily need to be there every day. And we can continue to clean to make sure that they're safe work environments and we can continually repurpose them. So I think that the plan that we've moved towards has given us lots of flexibility as we continue to think about what space is going to look like. And obviously in those places where we've had higher densification or higher populations trading floors or other places that have come back to work sooner we've obviously used Plexiglas and other types of things to create shields and to create safe work environments for people to return to all the banks. I think you're going to face an issue at the end of the year. A lot of the banks have done reasonably well this year in the coded period of time because they were able to adapt. They made a fair amount of money. In your case I think your traders did extremely well this year. But paying out big bonuses often creates political problems in Washington. How do you assess that kind of tradeoff. Paying out bonus to the people did extremely well versus not trying to get a lot of headlines that are going to produce challenges in Washington. I think it is. Usually we've got to be balanced in that approach right. That we've got to be mindful of our returns and our shareholders. We've got to be mindful of the environment that we're in and the many challenges that are out there for four people and for certain businesses. And at the same time we've got to be competitive in our industry. And you know we we we know we're fortunate to have good talent. We've got to recognize that. And so I would say we need to kind of figure out a path and thread the needle to paying fairly for our people. And again our people have done extraordinary work. And whether it's the traders or right down to the people in our branches that have come in and put themselves in harm's way to make sure that our branches are open and that people have access to their financial lives. And you know we've seen just incredible acts of selflessness from our people who really gone out of their way in these extraordinary times to make sure that our customers and clients get the service that they deserve and our people need to be recognized for that. So let's talk a moment how you became the CEO. It's an interesting story. But to go back are you grew up in Connecticut. And were you a scholar athlete or an athlete or a scholar or you were both in high school. I would hope I would hope I was a scholar athlete. So you were recruited to play football at Harvard or where you were recruited as an academic and you actually played football on the side. I would say that the football got me got me in faster than my academics did. So you went to Harvard as you were playing football at Harvard playing football. Is that a big deal in Harvard or people care about other things. And and was football exciting for you. There it was. It was. You know and I'd grown up playing the game and obviously very much enjoyed it. And again I think that at Harvard we had the right balance. I wasn't they don't get athletic scholarships and I was playing football not because I had to or needed to around being able to go to school. It was because I wanted to. At the same time I was an economics major. I'm very much enjoyed. I enjoyed that. I enjoyed the kind of the left brain right brain of the combination of athletics and and academia and you know got a lot of exposure to a very interesting people professors fellow students relationships and things that I continue to carry to this day. So all around very positive experience. Now you were an all American football player at Harvard. There aren't that many in recent years all American football players and Harvard. So were you surprised at that designation. And you think maybe I should go to the NFL and not go to the financial world. Well I was when the phone call came back in the day I was surprised to receive it. Obviously I was honored to receive it. But I had known from some of my my work in schools from some of the summer opportunities that I had that I did want to go into banking. And shortly after the season ended I did accept an offer back in those days to to go to one of our predecessor firms Salomon Brothers and join the training program there which was quite well renowned at the time and passed up an opportunity back in those days to to join the USFL and to not be part of the NFL draft that year. OK. So you worked at Salomon and ultimately you stayed at Salomon and its successor Citi for quite some time. I think you've been there now. Thirty four years or something like that. Seven. Thirty seven. Thirty seven years. OK so you're working your way up and doing various different things and then you're heading up the Europe and the Middle East is that right. That was my assignment David prior to becoming CEO. Right. So you're heading up Europe and the Middle East. You're living in Europe. To do that I assume is living in London. Right. You get a call from the chairman of Citi saying guess what. We want you to be the new CEO. Were you surprised when you say I really like living in Europe or you say OK I'm happy to do it. I was I was very surprised for those who know. Remember the time back in 2011 my wife and I moved to London to run our EMEA Europe Middle East and Africa operations. It's our largest operation geographically in the firm. And I candidly thought that was likely to be the last stop in my career that I would kind of serve my time there do the best job I could and eventually figure out what's next for me. And so I was quite surprised when 10 11 months later the phone call came from our chairman to to contemplate the move to becoming CEO. Your chairman then I guess was Mike O'Neill correct. Oh are you. You bring he brings you back. You're now the CEO. And you said oh we have a lot of problems here. Did you realize how Emma how severe the problems were when you took the job. And did they turn out later to be much more severe than you had initially thought. Well I think coming coming out of the crisis we we did a pretty significant restructuring of the company and I was part of that in terms of running for a few years are non core divestiture businesses. And what I would describe is really taking our company back to its roots and at its roots. It is a bank. It wasn't an insurance company. It wasn't an asset manager wasn't those things and returning it. And I think Vikram had done a very good job in terms of really setting in place parts of that transformation. I inherited that and there was certainly more work to do. And so we continued obviously on with that work. And I'm I'm quite proud of where we've where we came out of it and where we've gotten to today and in particular based on the challenges that we had at the depths of the crisis. So at the time before you became the CEO there was a very famous weekend where Citi had made an offer to buy Laconia. And they thought that it was going to get it. And then over the weekend another bank came in Wells Fargo and on scooped it up and then ultimately built that larger retail presence in the East Coast other places. In hindsight was that a good decision for you to let it go or you really had no choice. Or if you had gotten what cobia would have been much better for the bank to be where it is today. Well at first I have to say that I wasn't directly involved in that. But I'll give I'll give one person's opinion and that is I think it would have been an acquisition that would have been very helpful and creative to our consumer business because as we know in banking and in particular in consumer banking scale matters. And I think what Kobe would have given us a national footprint in our branch system that would match our national footprint in our credit card business. And I think putting those two things together would have been very powerful would have been a very powerful combination for us. But that being said when when it did go to walk over yet we needed to move on and we needed to focus there really with the hand that we're playing. And that's exactly what we've done. So when I was little I had a little savings account and they gave you a little passbook and you go to the bank and they would stamp how much money you might deposit and so forth like that. I forget where they record past books or something like that. And so you know you're proud to have your amount of money in there the interest you get each month or whatever it was. But everybody went to these bank branches that were very August looking things and they were imposing looking in some ways. But do we really need all these branch banks now because people do so much online do you. How many branch banks does city have in the United States around the world. Well we've got about two thousand two thousand a little over two thousand around the world that numbers come down. And I think one of the things that's coming out of Kobe it is the acceleration to digital and whether it's remote deposit capture or paying bills or digital transfers or any of those things. We've seen a quite a large acceleration of people using those channels. And I think that's exciting. And what we've done or what we describe as having happened we've actually pulled those timelines forward. And I think we've also got to be mindful. David in banking that we serve a continuum. We serve younger people like yourself. When you were young and you had your passbook all the way through retirees and within there there's a different set of expectations amongst our customers. So people very much like the branch. And if we called up and said hey great news we're closing the branch and we're going 100 percent to digital we would likely lose some of those customers. There is those like myself and my wife who very much enjoy the combination of the analog and the digital relationship having everything at our fingertips when we need it. But also knowing that I've got somebody I can call or a branch that I can go to when I need those services. And then clearly you know from the younger generations we're seeing them living the predominance of their financial lives remotely or digitally. And that's coming and we'll see if their preferences change. But in many ways what I described is we're kind of managing the transition of an analog bank to and through a digital bank in so many ways managing the two banks and in tandem and making sure that we can offer those services as customer preferences demand. So how often do you go into a branch bank and do they recognize you. I assume you in a way that they line you up. You go right to the head of the line. Well I absolutely do wait in line and I do go in. You don't go into a probably a dozen times a year maybe once a month or so a year. And I also in my travels do branch visits. And as I said I. The people in our branch system were extraordinary heroes in terms of you know coming to work every day all through lockdowns not just in the US around the world to make sure that we were open and that we were able as I described when our customers wanted that physical service to make sure it was there. And so I also make it part of my business that when I'm out and about just to stop in and she told people and thank them for what they're doing. So let's go through the main businesses a city. You have the consumer bank which has which is people do retail. And I assume that's a profitable business. Still you wouldn't be in it. It is I would say that in many ways David the backbone of our retail business is our global cards franchise our credit card. And I know that you are a proud city in a card. I think American Airlines carrying members. Thank you very much. And we operate the consumer business isn't about 19 countries around the world and it's the combination of cards lending as well as a depository as well as wealth management. So I do have the credit card and I'm very happy with it. But once in a while it gets denied a little bit. And I just wondered do you ever have denial problems. I do on occasion. What do you call out and think about doing something that kind of falls outside the ordinary. Oftentimes I'll get questions back asking you know is it. Is it me. And you don't say I'm the CEO of this organization. You never say that. I don't. OK so that's the consumer business. And then you have the institutional business which is doing I guess financings for large corporations and so forth. And that's still a pretty profitable business. It is. If you go to the backbone of that business I think it's really off of the back of what we call RTX Treasury and Trade Solutions Business which is really a a money movement. Payment processing business. We process over four trillion dollars in payments a day all over the world in in pretty much every currency that's out there. And obviously lending our markets our banking or investment banking our advisory our capital raising businesses all all come off of that. So under the Volcker Rule banks were not supposed to be doing any proprietary trading and I guess proprietary investing in private equity to some extent. Has that been loosened a bit. And you think it's wise to loosen it or do you think the constraints that were imposed by the Volcker Rule are pretty good. I think that the the challenge is in there and in particular and I don't want to get too technical around the ISE hesitations is that the regulators can't necessarily agree on exactly what that is. But proprietary trading is not it is not what we do. Investing in private equity is not what we do. You know we're here as a market based facilitator creating markets transacting raising capital and doing those things. And so I think we find ourselves pretty living pretty easily and consciously inside of those bounds that have been set. And again I don't think it I don't think it takes in any way from who we are. The things that we can do for our clients. Let's talk about some new trends that are going on in the financing world. One of them is so-called fintech which means using technology to enhance the ability to get things done through banks and other kinds of financial service organizations. How have you been involved a lot in fintech at Citi and you use a lot of A.I. to help you in fintech. Well we haven't been we've obviously been very involved in terms of the push to digital. And you know the nice thing about the push to digital is that it generally creates a better customer client experience. And I think one thing that's important about that is understanding that the way we think about it is not creating a bested bank experience but it's really creating or trying to match the best in life experience meaning that as people live their lives whether it's the Uber the other apps that are there how can we create a banking banking experience that rivals those types of things. And I think the competition the energy the smarts the investment I think have all led to not just city but the industry being better. And in there it's it's. We don't necessarily think of fintech is the competition. FinTech in many ways is a big part of the future. And so what you've seen us doing in many ways is not just embracing the technology but it's embracing some of the participants using our strengths in terms of our global presence using our strengths in terms of our scale to match with some of their agility some with some of their new processes to create things that are that are new and outside the traditional bounds. And so whether that's been on the customer experience side or very much prevalent in terms of our cyber work and the things that we're doing to protect our bank and to protect our banking clients a lot of those things you know we're not we're not inventing. Right. We know that there's better places for those places to be done. And so we've partnered we've made investments in some of those companies. We've created different arrangements around some of those. And you know whether it's been with Google or some of the other things you've seen us announce not just here in the United States. I think it's quite exciting. And in particular around the future of banking. Well you mentioned cyber. Let's talk about that. What are the chances that I have a credit card account there and I maybe I have a savings account or something. The chances are that somebody's going to break in and get my information. How much time and money do you spend that prevent that kind of cyber attack. Well I would say that one of if not the fastest growing areas within sight are an institution is our work around cyber in terms of people in terms of resources spent. And we have to take that and we have to have that mindset because obviously it's not going away. And in fact when you get into stressful periods like the pandemic those bad actors as they're called try and use those opportunities to exploit your weaknesses. And so we've invested heavily along the ways and you know like other institutions were attacked all the time. But our team I think has done a great job. They certainly don't rest on their laurels. And we know that the threat and the threat factors continue to evolve. We've also I think had good partnerships with other institutions. So the big banks are allowed legally to share information in this space. And we do because we view it not as a competitive strength to be better than the next bank. But you know we're only as strong as the system. And so we're not just working for our efforts. We're working for the system and the entirety of the system and working in close partnership with the government. And I think so far that has served us well. But with the same recognition that we can't we can't let our guard down at all. I'm not a big online banking person. You might not be surprised to hear given my age I tend to do old fashioned things. So I have these checkbooks and I still write checks out. Is that business going away. Well we can say eventually it is David. But interesting. I haven't seen the numbers of late but I think that year in twenty nineteen there was still somewhere around twenty five billion checks written in the United States. And actually interestingly as advanced as the U.S. economy is the U.S. has probably been amongst the most reticent in terms of being willing to give up the checkbook. I remember being living in London in the UK in the early 2000s and we'd already moved beyond checking in. But you know there's parts of the US and you know certain age groups or certain cohorts that you know still enjoy their checkbook. We certainly offer lots of opportunities around paying bill directly and paying bills online or creating repeating services to pay the longstanding things you haven't David. If you'd like to look into any of that we'd be happy to get a banker to work with you. Hey so what about A.T.M.. Is that a profitable business. And why do people get upset when they get charged fees for using Global news 24 hours a day on air and @TicToc on Twitter. Powered by more than 2700 journalists and analysts in more than 120 countries. This is Bloomberg. Ms. Well we certainly don't view the A.T.M. as a profit center and obviously if you're a city customer and you know we've got tens of thousands of ATF is kind of all over the place and they're there. And we I would say view it more as the right word is necessity. But it's part of what you need in today's society to make sure that people have access to their cash where and when they want it. I think a good good news is and I think Kobe has has shown us is that you know we do have alternatives digitally to to to cash. And again interestingly the US is still a predominantly cash society. I think we've seen a deceleration or we've seen a slowdown in terms of that cash usage and we've seen obviously digital uptake coming up. Many merchants today don't want to accept cash around around the safety and hygiene potentially of that. But you know we still have to make it available. And I think our our A.T.M. networking footprint reflects demand. And like our branch network as that demand comes down and preferences shift we'll certainly adjust our teams to that. What about crypto currencies. Do you think they're the wave of the future. You think they're something that there's a passing fancy. I think it depends. It depends what. What the underlying nature of that currency is. Some are. Some in essence are stored value. Some have been compared to modern day gold. Some have been compared to alternatives. And I think that crypto currency. So so one is I think that we will see in the not too distant future a sovereign. I wouldn't say crypto. I take digital currency coming out. We've been working with some governments around the world in terms of the creation and commercialization of them. I think it's inevitable that that will be coming. And I think that some of these currencies will just be continued. Alternatives continue. Different sources of payment that people can take advantage of based on the underlying nature of what they are. I'd say it's around the world. One of the issues of late or maybe in the last couple of decades is that sometimes people shop with enormous amounts of cash and you don't know where they got the cash and they wanted to posit it. How did City make certain that the money has a legitimate source before you take an account. Well we've got to do a background check but we've got to do in essence the due diligence and for those that have opened open accounts. We ask FTSE of the industry asked lots of questions. It's not necessarily because we want to or it's going to thrive on asking as many questions but those are questions that are necessary around knowing who you are what they call the KYC rule the know your customer rule and what the sources of income or what the sources of moneys are and to and to understand that customer and the way that they'll be using the bank. And obviously that's all done to protect the system to protect from money launders to protect from criminals to protect from the bad actors that are out there and the control of trying to limit monies that are available to move into illegal or improper sectors. And obviously between the institutions and the government we dedicate a lot of resources and we work quite hard. Okay. So let me ask you about one new area of finance that city has been a leader in which is called Spark which is Special Purpose Acquisition Corporation. Why are they so popular all of a sudden. And is this a good thing for the economy and are they proliferating too much. Well I think you know stacks have kind of typical day a desire. And that is you know when you look at IBEX the reason for uptake suspects is you know well it is not any one specific thing that some people view them as an alternative path to the IPO. Some people view them as as a way of kind of stepping in to certain investments and amassing and consolidating. Some people like the the structure and the time that comes as a consequence of this back and your ability to call on and to deploy those moneys. So I think at a point in time where people are looking some for some flexibility I think facts of have risen to that. You know people do say that gee there's a lot being done. And you know is that for proliferation really healthy. Again I think like anything provided things are being done for the right reason. And I think they they largely are being done for the right reasons. You know the time of test the test of time will certainly speak to that and get around our our client base. I think you know we've seen a number of very shabby institutional clients private equity investors companies using this back process that to give them some of that flexibility. So as we talk today you will be stepping down as CEO I think in February of next year. Is that right after eight years. And so are you looking forward to that. Are you saying well maybe I really like one of my job and maybe I would stay a couple more years if I could but I'm going to be leaving. So how do you look at it. Bittersweet or what's your perspective. So one is is I very much enjoy my job like my job. I love the company. It's the only place that I ever worked. You know as I say I graduated on a Friday and I started work on a Monday. And going on 38 years later here I am. So no other place would have me. But but here I am. But I also believe David that you know in in these times that some of these jobs should have term limits. And my own belief is that you know in my run I'm proud of what we've accomplished. But I know there's more to do. And I know you know Jane is very capable. She's going to be a fantastic CEO. And that Jane and the management team that we've put together I think is very up for the next chapter. City where a 200 year old institution and I think has has a great has a great future has its best days ahead of it. And I'm proud in terms of how we're leaving it and in particular proud in terms of the team is going to be there to lead it into into the future. So when you came in and replaced your predecessor did he call you later and say you're doing this wrong or you've changed this or this. Did he give you a lot of advice and you expect to call your successor and say why you should do this differently. Or how do you expect to have a relationship with your successor. That's always a complicated situation I guess. So we're going through transition now. And transition was important to me because I didn't really have the the benefit of a transition. My my appointment was fairly abrupt. And Jane and I think working closely and I kind of deal with the day to day as she deals with the future of the company I think that's appropriate and kind of going through all the year and processes all the budgeting and planning all of the strategy work all of the year and things that go on and really giving her a chance to kind of live and see those things up close I think is going to be valuable to her. I will stay out of the way when my time comes but I'll always be available. I'll be available to her. I'll be available to the firm if they should ever want to reach out. But I'm not going to I'm not going to be armchair armchair quarterbacking. I'm not going to be second guessing. I know at times how difficult the job is and I have respect for that. So let's talk about the recovery from the Great Recession. All the major banks had some challenges for sure and they took money from the federal government. Some wanted to take it. Some didn't want to take it but they all took it. And now 10 years plus later I do think Citi has recovered as much as the other banks have or as much as you would like them to see. And do you think cities lag behind some of the other banks in terms of recovering from the Great Recession. Well I would start out by saying that I think since the last crisis we've done a lot of work. I think wall breaks out in terms of building capacity and cushions and being able to serve the economy through challenging periods like the one we're experiencing now. Every company every bank has been on their own journey. And I'm not going to comment on the transformation of my peers but I feel very comfortable saying that the scope of the transformation that Citi underwent since the financial crisis has been much has been enormous. And I think as a result of our improved focus in investments Citi undoubtedly became a simpler safer and stronger institution. We improved the quality and consistency of our earnings. We significantly increased our returns for our investors. And as examples David you know when I took over I inherited net income of about seven and a half billion dollars. The end of last year 20 19 that was over 19 billion dollars. Our return on assets went from under 40 basis points to right about 100 basis points. Our return on tangible common equity increased from 5 percent to 12 percent closing the gap with our peers. We went from returning really no capital to returning nearly 80 billion dollars of capital to our shareholders over the last six years and reducing our share count by about 30 percent. So are we done. No. Are we. The words I use we should be pleased but not satisfied. And I think that the team that's that's taking the field here is ready to continue to push Citi to the next chapter. And there's always more work to be done. So when you talk about the transition let's talk about what you're going to do next. My observation is that when one is the CEO of something like Citi you can get your calls returned in about one second or so. Not hard to get a meeting with anybody you want to see. Are you thinking that's going to continue the same when you're not the CEO. Your people will call you back right away. If you go see anybody you want in the world. Well I would say first that my seeded city the number of seats I've had but in particular this seat has given me the the opportunity the real the real opportunity to get to the meat. No. A number of very interesting people not just in the US but around the world. And at the end of the day I also do recognize that a number of those relationships aren't necessarily mine but they're the companies relationships as they should be. And those those relationships will stay with the company along the way. You do. You do make some friends. And so I'm not sure every phone call rule will we'll be returned as as punctually as maybe once was. But I will come out of this with a number of friendships and people that I've gotten to know along the way that I hope to be able to stay in touch with the future and to continue to stay involved with. But when you step down and you're now the CEO you expect to take some time off to rest 30. You expect to get right back into the fray. And what would you consider the highest calling of mankind as I've called the private equity or or what are you thinking of doing. Well I think right now my objective is as they say to run through the tape that I'm just really focused on the transition and giving Jane the best transition I can give her and obviously focused on delivering and closing out out the year when February comes. I plan to step back. And for now David I've declared the highest calling in life in terms of what's next for me is to become a grandparent on the verge of becoming a grandparent. I look forward to that. It will be our first grandchild. And then to step back and take a little time. That obviously 38 years of one institution eight years in my current role to take some time to decompress a little bit and to see what's out there and figure out what the next chapter. I still feel I've got another chapter in my own mind relatively young. I still got a lot to learn. I'm still interested. And so whatever that may be I look forward to exploring that. And I think the exploration is going to be a big part of the fun. Well you are very young. I mean you're the new president. The United States is about 17 years older or something like that. So you know you're very very young. So you've got a long way to go. So final question is this somebody who is looking forward to graduating from college this year why would you recommend that he or she go into the financial services world and particularly a bank like Citi. Why wouldn't somebody say what's too big a bank. I'm not going to learn anything. I'll never rise to the top. Why should somebody want to go into a bank today. It's different than when you came in 38 years ago. Or is it not different in your view. Well I think it is different. And it was exciting back then based on a number of things that were that were going on and some of the deregulation in the early 80s as you remember and how that changed financial services. And I think that you know right now we're in the midst of a big transition and that's as we talked about this transition from analog to digital. And I think getting in on the ground floor around fintech and around that move and what you know finance is going to reinvent itself as as we go forward. In many ways there's probably certainly in recent history not a not a more exciting time to be to be joining the industry. And I think you're going to continue to see massive change within the industry. I think at Citi you'll see us continue to evolve the institution. And I think our benefits of scale and presence and longstanding relationships and the things that we've had in the investments are going to serve serve Shery Ahn our company well. And by the way I would be remiss if I didn't say the industry I think is you know you look at coming out of the last financial crisis and where the industry is today not to overstep or over speak but I think the industry in particular here in the U.S. but around the globe has really functioned or or operated as a source of strength that we're in a health pandemic that has significant economic ramifications. And I think that the financial services industry has really brought to life a number of these governmental fiscal monetary programs. And I think our ability from an economic from a policy from a societal perspective to be there really weighing in on important issues. And that's just not the economic but it's the environment it's society. And a number of the things that we've been through and I think you know the banks have played an important role and I think only become potentially more important as we as we go forward. And so I would tell everybody it's an exciting time to join. I think you're really enjoy it. And yet you kind of have half the fun that I had. I think it's a great it's a great calling. Well congratulations on. Coming a grandfather of shortly and I know you'll enjoy it and thank you very much for it. Very interesting conversation Michael. And best wishes to you and your next career whatever that might be.

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Citigroup CEO Michael Corbat on Economy, Legacy

In this latest installment of "Bloomberg Invest Talks," Carlyle Group Co-founder David Rubenstein sits down with outgoing Citigroup Inc. Chief Executive Officer Michael Corbat to talk about his eight-year tenure as head of one of the world’s biggest banks, managing through the Covid pandemic, and what he sees next for the global economy. (Source: Bloomberg)

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