Citigroup announced third quarter earnings on Tuesday morning, and along with a slight earnings beat the bank delivered the news that it would take “strategic actions” to leave markets where it’s not making as much money, including Japan and Egypt.
Until they’re sold off, the businesses will be piled in with the rest of the toxic assets Citi keeps in Citi Holdings. That’s all the nasty stuff the bank has been trying to get rid of since the financial crisis.
Strategic Actions: Global Consumer Banking
Citigroup today announced strategic actions to accelerate the transformation of Global Consumer Banking (GCB) by focusing on those markets where it has the greatest scale and growth potential. As a result, Citigroup intends to exit its consumer businesses in 11 markets. The new consumer banking footprint will serve nearly 57 million clients in 24 markets that capture over 95% of GCB’s existing revenue base, while further simplifying its operations and improving its performance.
The affected businesses include the consumer franchises in Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in Korea. Active sales processes are underway for the majority of the businesses, and subject to market conditions and regulatory and other approvals, the strategic actions are currently expected to be substantially completed by year-end 2015. The businesses will be reported as part of Citi Holdings as of the first quarter 2015 to provide greater transparency with respect to the performance of the ongoing operations reported in GCB. Citigroup’s Institutional Clients Group (ICG) will continue to serve clients in these markets.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders. While we have made progress optimising these 11 consumer markets, we believe our Global Consumer Bank will achieve stronger performance by focusing on the countries where our scale and network provide a competitive advantage,” Mr. Corbat concluded.
Manuel Medina-Mora, Citi Co-President and CEO of GCB, said: “Today’s actions are the next step in the execution of our strategy to build an urban-based, globally integrated consumer bank. Since 2009, the Global Consumer Bank has become more streamlined, efficient and profitable. Focusing our presence in 100 cities across both the U.S. and top emerging markets where we have the greatest scale and growth potential positions us to win.”