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Citigroup Says Goodbye to CalFed's 'Elvis' Campaign

Marketing shift marks revamp after takeover of the California bank. Citibank is expected to push its many products.

January 12, 2003|E. Scott Reckard | Times Staff Writer

Elvis -- Schmiedekamp, that is -- has left the building.

Citigroup Inc. has given the folksy California Federal Bank pitchman the boot, pulling ads off the radio, thinning the ranks of Elvis-emblazoned billboards around the Southland and shutting down CalFed's Schmiedekamp Web site.

The decline in Elvis sightings is the most visible sign so far of a promised makeover of the 350-branch savings-and-loan network that Citigroup acquired when it bought CalFed's parent, San Francisco-based Golden State Bancorp, last year for $5.8 billion.

As part of CalFed's transformation, Citigroup's Citibank unit is expected to offer customers a much wider range of personal and business checking accounts and other full-service financial products, including private-banking services for the wealthy. It also is expected to push life insurance and annuities, investments and financial advice from its many subsidiaries and affiliates. Among them: Travelers Property Casualty Corp. and brokerage Salomon Smith Barney.

The bank's effort will be backed by a post-Elvis marketing blitz. As the signs on CalFed branches change to Citibank in February and March, Californians will be treated to a barrage of Citibank's offbeat "live richly" ads. One already being printed touts Citibank's "staggering array" of rewards cards, featuring a bulldog that grins madly thanks to a full set of dentures. "You must have been awfully good in another life," the caption reads.

Yet analysts say it will take far more than substituting one quirky marketing campaign with another for Citibank to truly establish itself in the competitive California banking market. Citigroup, the nation's largest financial services company, has long had a retail banking presence in the Golden State, but it has been a bit player until now with only 77 Citibank branches.

CalFed has remained a thrift at heart, built on certificates of deposit and home loans, and Citibank is destined to bump heads with the full-service duopoly that has long dominated the California retail banking scene: Bank of America Corp. and Wells Fargo & Co.

Beyond those two big players, Citibank must tussle with rivals ranging from the big savings and loan Washington Mutual Inc. to brokerage giant Merrill Lynch & Co. Merrill is promoting its capabilities as a bank by offering checking, ATM access and other such services to its retail brokerage clientele.

Citibank has other challenges as well. For starters, the company must battle its image as a distant behemoth, based in New York. Its parent company also has been involved in a series of recent scandals and controversies that have done little to foster consumer confidence:

* Citigroup and Salomon Smith Barney paid the highest fine, $400 million, of any Wall Street firm last month to settle charges of analyst conflicts of interest.

* Over the opposition of consumer groups, Citigroup helped lead the legal challenge to a California law requiring issuers of credit cards -- a huge business for Citibank -- to warn customers of the consequences of making only minimum monthly payments on their bills. A federal judge invalidated the law last month.

* The buyout of Golden State was stalled for months by complaints about abuses in Citigroup's sub-prime lending operations. The deal was completed only after the company reached a $215-million settlement -- a record for a mainstream banking institution -- in a predatory lending case brought by the Federal Trade Commission.

"We're going to keep watching them closely," says Robert Gnaizda, general counsel for an advocacy group called the Greenlining Coalition, which opposed the takeover. The organization had expressed concerns that Citigroup's real goal in acquiring Golden State was to market high-interest loan products to California's vast minority communities without doing enough to "mainstream" those customers.

Clearly sensitive to the criticisms, Citibank's top California officials, along with high-ranking retail banking experts from headquarters, last month attended a celebration marking the halfway point in construction of a huge community center the company had helped fund in Fruitvale, a district of ethnic markets and payday loan shops in Oakland.

At the ceremony, Oakland Mayor Jerry Brown praised the development for bringing in investment. Community leaders thanked Citigroup for supporting the center. And bank officials says Salomon Smith Barney's underwriting of bonds for the project and Citibank's providing of the main loans demonstrated how the company's economic muscles can be a positive force.

"Having a physical presence is really important," Marge Magner, chief operating officer of Citigroup's Global Consumer Group, told those attending the event. "You can want to do lots of things, but when you have a very small presence, as Citibank had before, it really limits your ability to do things that are meaningful -- participate both at a community level and at a business level in any significant way."

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