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Citi to shut Mass. banks, end theater sponsorship

Citigroup’s sponsorships include the Citi Performing Arts Center (formerly the Wang) in Boston. Jim Davis/Globe Staff/file 2011

Citigroup Inc. will pull out of the Massachusetts retail banking market in January, closing its remaining 17 branches and taking with it the sponsorship of the Citi Performing Arts Center in Boston’s Theater District.

The New York financial giant said it will maintain its private banking office for wealthy customers and continue to serve institutional and commercial banking clients here.

But it will end its support of the nonprofit arts center — which operates the Citi Wang Theatre, the Citi Shubert Theatre, and, for a short while longer, the Colonial Theatre — when the naming rights contract comes up for renewal in November 2016.


“Do you know anybody who wants naming rights?’’ cracked Josiah A. Spaulding Jr., president and chief executive of Citi Performing Arts Center, in an interview with The Boston Globe Wednesday evening.

Spaulding said Citigroup has been “an incredible partner’’ but that the bank’s departure will not spell doom for the arts center. The bank’s financial support, while enough to warrant naming rights, amounted to less than 10 percent of Citi Performing Arts Center’s roughly $30 million budget, he said.

“We will be fine,’’ said Spaulding.

Perhaps the greatest impact of Citi’s departure will be on the customers of Citigroup’s 17 branches, which are primarily in the Boston area.

Citigroup burst into the Boston area nearly 10 years ago, hiring bank managers from local competitors, opening branches in prime locations, such as the Back Bay, Wellesley, and Cambridge, and inking a $34 million contract to put its name on the Wang Center for the Performing Arts. At its peak, Citigroup had more than 30 branches in the Boston area.

But between the financial crisis and its failure to grab a foothold in the market, Citigroup has struggled here.

The bank has now decided to focus more on its target markets, including New York City, Los Angeles, Miami, San Francisco, and Washington, D.C., said Andrew Brent, a bank spokesman. Significant investments are planned for “enhancing our digital channels and building a new branch model in our major, target markets,” he said in a statement. Citi’s retail banking presence in Boston, he said, does not provide the needed scale.


Although it runs the fourth-largest US bank by assets, Citigroup never had more than a 1 percent market share in Massachusetts. By comparison, Bank of America Corp., the state’s largest retail bank, holds 18 percent of the market.
Soon after Citigroup opened in Boston, the economy entered a downturn, and the bank took $45 billion in government aid designated to help banks during the financial crisis. It was also one of the hardest hit by the recession and credit crisis and weighed down by legal bills, including a $7 billion settlement last year with the Justice Department over its sale of faulty mortgages.

The bank’s performance has improved in recent years, but its revenues have been flat lately. Citigroup has been aggressively cutting expenses, in part by trimming its branches. In 2013, it closed all of its Philadelphia branches.

“It felt like a lot of energy at first, and a year or two later, it felt like a lot less,” said Suzanne Moot, a Milton bank analyst, about Citigroup’s Massachusetts venture. But breaking into retail banking in Massachusetts, which has more than 300 separate financial institutions, from national giants to small mutual banks and credit unions, is hard, she said.


“You have to knock heads, not only with Bank of America and Citizens” Financial Group, Moot said. “But in a state like Massachusetts, the local banks too. Retail banking is a tough business; it takes time for success to play out.”

The arts are also a tough business, and Citi’s departure may raise anxieties, especially since it is the second unhappy surprise this month for the normally placid theater district, following the announcement that the Colonial Theatre will soon close for at least a year while it undergoes extensive renovations. A spokesman for Emerson College, which owns the venerable theater, said that “not continuing to operate it as a theater’’ was among the options being considered.

The Citi news could also raise wider concerns about the solidity of corporate sponsorships in an arts community that’s perennially concerned about funding. The decision facing Citi Performing Arts Center now, Spaulding said, is whether to seek sponsorships from “one corporation, several corporations, one individual, several individuals.’’

For now, the theater community will wait to see what name, or names, eventually take the place of Citi.

Said Spaulding: “We’re hopeful that somebody else — as early as tomorrow — will say: ‘I know the value of that.’ ”

Deirdre Fernandes
can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.