Announcing its first-quarter results, Citigroup on Thursday said it is closing retail banking operations in 13 countries across Asia, including India, and parts of Europe to concentrate more on wealth management outside the US. However, the bank did not give any timeframe for the exits.
This is seen as one of the first big strategic moves made by CEO Jane Fraser, who took over the company's reins in February this year.
Besides India, the third-largest bank in US will exit consumer operations in China, Australia, Malaysia, Bahrain, Korea, Indonesia, Russia, Vietnam, the Philippines, Thailand, Poland, and Taiwan.
However, the decision will not have any immediate impact on Citigroup's operations and its employees in India.
"India is a strategic talent hub for Citi. We will continue to tap into the rich talent pool available here to continue to grow our five Citi Solution Centers which support our global footprint. There is no immediate change to our operations and no immediate impact to our colleagues as a result of this announcement. In the interim, we will continue to serve our clients with the same care, empathy and dedication that we do today," Citi India CEO Ashu Khullar said.
The Citigroup will need to find a buyer for its retail banking operations in India.
Khullar said Citigroup will continue to deliver innovative digital solutions, backed by its global network, and devote its resources to large and mid-sized Indian corporates and multinationals, financial institutions, start-ups in the new age sectors, amongst others.
According to Fraser, Citigroup plans to focus on its non-US consumer banking operations in UAE, Singapore, London and Hong Kong as these places have a great concentration of wealth.
"As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth," Fraser noted in a release, adding that the move to zero in on the remaining markets "positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs."
He further said that Citigroup lacks the scale to compete in the 13 markets it is leaving. However, the investment banking operations will continue in these markets. "While the other 13 markets have excellent businesses, we don't have the scale we need to compete," Fraser said.
Citi Asia Pacific CEO Peter Babej said, "Asia Pacific is an integral part of our global strategy, and a key driver of our growth and value proposition. We will continue to invest in our network across the region and deliver Citi's unique global capabilities to clients across all our markets."
Citigroup Inc trounced analysts' first-quarter profit estimates on Thursday as its outlook for an economic recovery driven by vaccinations and government stimulus allowed it to release reserves set aside for loan losses from the pandemic.
Like JPMorgan Chase & Co, which reported earnings on Wednesday, Citi benefited from a boom in capital markets activity, but its consumer bank felt the impact of low interest rates that hurt earnings.
Revenue fell 7% on low interest rates and a 10% decline in loans, largely due to lower consumer credit card loan balances. Partially offsetting the drag from interest revenue, investment banking revenue surged 46% on stronger equity underwriting fees.
Net income tripled to $7.94 billion, or $3.62 per share, from $2.54 billion, or $1.06 per share, a year earlier. Analysts on average had expected a profit of $2.60 per share, according to Refinitiv IBES data.
The bank's bottom line was bolstered by its decision to draw down $3.85 billion in reserves it had built up for expected loan losses from the pandemic. A year earlier it had added $4.88 billion to its loss reserves.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today