Citigroup leaves the bank’s consumer operations in India
Announcing its first quarter results, Citigroup said on Thursday it was closing its retail banking operations in 13 countries in Asia, including India, and parts of Europe to focus more on managing heritage outside the United States. However, the bank gave no time limit for exits.
This is considered one of the first big strategic moves from CEO Jane Fraser, who took over the reins of the company in February of this year.
Besides India, the third largest bank in the United States will exit its consumer activities in China, Australia, Malaysia, Bahrain, Korea, Indonesia, Russia, Vietnam, the Philippines, Thailand, Poland and Taiwan.
However, the decision will have no immediate impact on Citigroup’s operations and its employees in India.
“India is a strategic talent center for Citi. We will continue to tap into the rich talent pool available here to continue to develop our five Citi Solution Centers that support our global footprint. There is no immediate change. in our operations and no immediate impact on In the meantime, we will continue to serve our customers with the same care, empathy and dedication as today, ”said Citi India CEO Ashu Khullar.
The Citigroup will need to find a buyer for its retail banking operations in India.
Khullar said Citigroup will continue to provide innovative digital solutions, supported by its global network, and dedicate its resources to large and medium-sized Indian companies and multinationals, financial institutions, start-ups in new age industries, among others. .
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According to Fraser, Citigroup plans to focus on its non-U.S. Consumer banking operations in the United Arab Emirates, Singapore, London and Hong Kong, as these places have a high concentration of wealth.
“Due to the ongoing refresh of our strategy, we have decided that we will double the wealth,” Fraser noted in a statement, adding that the shift to focusing on the remaining markets “positions us to capture the strong growth. and the attractive returns that the wealth management business offers through these important hubs. ”
He added that Citigroup did not have the size to compete in the 13 markets it was leaving. However, investment banking operations will continue in these markets. “While the other 13 markets have great companies, we don’t have the scale we need to be competitive,” Fraser said.
Peter Babej, CEO of Citi Asia-Pacific, said: “Asia-Pacific is an integral part of our global strategy and is a key driver of our growth and value proposition. We will continue to invest in our network at across the region and to deliver Citi’s unique global capabilities to our customers. in all of our markets. ”
Citigroup Inc beat analysts’ first-quarter profit estimates on Thursday as its outlook for an economic recovery led by vaccinations and government stimulus measures allowed it to free up reserves for loan losses from the pandemic.
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Like JPMorgan Chase & Co, which released results on Wednesday, Citi has benefited from a boom in capital markets activity, but its consumer bank has felt the impact of low interest rates which detracted from profits.
Income fell 7% due to low interest rates and a 10% drop in loans, largely due to declining consumer credit card loan balances. Partly offsetting the slowdown in interest income, investment banking income jumped 46% on higher share purchase 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 expected earnings of $ 2.60 per share, according to data from Refinitiv IBES.
The bank’s financial results were 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.