Citicorp Marketing Move: S&Ls; Will Be Called Banks

Seeking to distance itself from the thrift crisis and enhance its marketing clout, Citicorp announced Tuesday that it plans to change the names of its Citicorp Savings subsidiaries in California and other states to “Citibank, Federal Savings Bank.”

“There is no question that research says the name ‘bank’ has a distinctively stronger appeal than does ‘S&L;,’ ” Citicorp Chairman John S. Reed said.

Reed made the announcement during his “State of Citicorp” speech here before securities analysts, in which he warned of continuing short-term losses from bad real estate loans and from the company’s Los Angeles-based Quotron Systems. But he said he hoped for annual earnings of $5 billion by the end of the decade, up from $498 million in 1989 and $1.86 billion in 1988.

In addition to Citicorp Savings’ 140 branches in California, the name change will apply to Citicorp thrifts in Florida, Illinois and Washington. Despite being called banks, the subsidiaries will still operate as savings and loans.

The company plans to eventually link the 252 thrift branches to the entire Citicorp network and include Citi-One, a service that will integrate a wide variety of accounts.

Recent changes in federal laws removed limitations that had restricted Citicorp from using the name of its flagship New York bank, Citibank, with its S&L; units.

Citicorp entered the California market in the early 1980s when it bought Fidelity Federal Savings & Loan and later thrifts owned by Sears, Roebuck & Co. Citicorp, the nation’s largest bank holding company, has made it clear that it would like to expand in California, already its second-biggest domestic market behind New York.

Neither Reed nor Citicorp spokesman John Maloney would say what properties the company is interested in, but the company has traditionally bought ailing thrifts and then bolstered them with cash infusions.

Reed said he expects Quotron, an international securities-market data system provider, to be out of the red by the mid-1990s. He predicted that the division will start to rebound as new data services are introduced.

Citicorp, like so many other banks, has also suffered from the sluggish real estate market. The company’s renegotiated and non-performing domestic real estate loans rose 112% last year, to $1.6 billion from $548 million. And Reed said he expects losses to continue at least for the next six months.

“We are clearly going through a tough patch in the U.S. marketplace,” Reed said.

Thomas G. Labrecque, president of Citicorp rival Chase Manhattan Corp., also said Tuesday that he expects to see a steady increase in problem real estate loans over the next several months as sluggishness in many commercial and residential markets continues.

But Reed denied recent newspaper reports that Citicorp plans to de-emphasize lending to large real estate ventures, adding, “We have a long-term commitment to this business.”