Citigroup cuts presence in some cities
Print Edition
CITIGROUP Inc has been quietly scaling back its consumer banking presence in some of the world’s major cities, exiting markets where it is not competitive.
In 2014, Citi retail executives went from targeting 120 of “the world’s top-150 cities” to homing in on 100 cities where the company has the greatest scale and potential. As a result, it is withdrawing from Tokyo, Lima, Panama City and Houston, for example. In the United States, it is now focused on six cities, down from 14.
While the bank has no specific plans to cut more branches in the near term, it will continue to re-evaluate its holdings, said Jonathan Larsen, who oversees Citigroup’s overseas retail branch business.
“We have to make sure that we are not subsidizing marginal operations for long periods,” Larsen said.
Cutting back in consumer banking will eat into the group’s earnings, at least in the near term. The bank is expected to book some US$800 million of restructuring charges in the fourth quarter when it posts results tomorrow.
Chief Executive Michael Corbat has announced US$2.4 billion of additional restructuring costs in the last two years. The bank hopes the spending will eventually save it some US$3.4 billion annually.
The charge, on top of a likely US$2.7 billion fee for litigation, is set to all but wipe out Citigroup’s profits for the fourth quarter.
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