Citigroup could earn nearly $9 million in tax incentives from the state of North Carolina over the next decade as the bank looks to hire more than 500 employees in Charlotte — one of the country's banking meccas.
The bank's $16.1 million investment in beefing up its Charlotte operations comes with a state grant for contributing to the local economy, if the bank meets job creation and investment targets, Gov. Josh Stein's office announced Tuesday.
Citi's new office space will accommodate its 275 employees currently in Charlotte, along with the additional hires, who will be focused across functions like personal banking, marketing, risk and operations, said Edward Skyler, head of enterprise services and public affairs at Citi.
"We've been reviewing our footprint in the U.S.," Skyler told American Banker on Wednesday. "We look at everything from the availability of talent to quality of life, to tax competitiveness. … Given our expense environment, we have to be very disciplined about where we invest."
The $2.6 trillion-asset bank hasn't announced details about its workspace, but its investment will cover the leasing and development of a new office. Citi's employees in Charlotte currently work out of a coworking facility, Skyler said, but the bank's space should be ready by early next year, "if not sooner." He added that it may take a couple of years to fill the expected roles.
The North Carolina governor's office said the state expects Citi's new hires to bring an annual payroll impact of more than $65 million to the community.
Citi began reviewing its national footprint in late 2023, homing in on Charlotte last year, Skyler said. He met with Stein earlier this year and finalized the agreement "recently."
Charlotte is a banking titan in the U.S., serving as the headquarters or a hub for firms like Bank of America, Truist Financial, Ally Financial and Wells Fargo. Wells alone employs some 27,000 people in the city, per the Charlotte Business Journal.
The state projects that Citi's investment will grow North Carolina's economy by more than $2.7 billion, with an estimated return on investment of public dollars of about 255%, totaling about $3.55 in state revenue for each dollar of potential cost.
"Citi's decision makes clear once again that Charlotte is one of the nation's top financial centers," Stein said in a prepared statement. "North Carolina offers a specialized and highly skilled workforce along with a friendly business climate."
Though Citi is expanding its footprint in the Charlotte area, the bank's presence there won't grow to the scale of its operations in other parts of the country — like the roughly 8,000-person workforces in North Texas and Tampa, Florida. At least two-thirds of the bank's 72,000 full-time employees in the U.S. are based outside of New York City, where Citi is headquartered, Skyler added.
Skyler said the bank has been consolidating in some locations, like San Antonio, Texas, and Jacksonville, Florida.
"This is a unique area where we decided that we have an opportunity to grow," he said of Charlotte.
Citi CEO Jane Fraser said on an earnings call in January that even as the bank works to simplify its business model and overhaul risk management programs, its operating expenses may remain elevated.
"As CEO, I will not sacrifice the right long-term investments in our growth and competitiveness for short-term expediency," Fraser said on the call. "We know what we need to do. We've got our arms around all of this."
As of March 31, the company owed about $3 billion in future lease payments, with an average remaining lease term of six years, according to a public filing. Citi also disclosed that it had a future lease commitment scheduled to commence in April 2025, totaling about $255 million over a 15-year term, but didn't reveal the city where it was renting the space.
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