US bank Citigroup is pulling its consumer banking arm out of 11 markets across Asia, Europe, the Americas and the Middle East, it announced today.
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, as the company looks to focus more on “those markets were it has the greatest scale and growth potential”.
Citigroup has already begun the sales process for the majority of those businesses it is offloading, and expects to have completed the process by the end of 2015.
The remaining consumer business will serve nearly 57 million clients in 24 markets, retaining more than 95 per cent of its existing revenue base.
Citi's chief executive Michael Corbat said: "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 (GCB) will achieve stronger performance by focusing on the countries where our scale and network provide a competitive advantagE.
Manuel Medina-Mora, Citi co-president and chief executive of GCB, added: "Today's actions are the next step in the execution of our strategy to build an urban-based, globally integrated consumer bank...
“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."
The announcement came as it revealed profits were up 6.2 per cent for its third quarter, reaching $3.4bn, as revenues climbed 9.5 per cent to $19.6bn.
Separately, Citigroup today has disbanded its Mexico-based personal security services business Banamex following an investigation that “uncovered illegal conduct, including fraud in the range of $15m, the unauthorised providing of security services to outside parties and the use of intercepted telecommunications”.
The group has notified law enforcement and regulators in the US and Mexico about the matter.
Security services will be provided by Citi's global security function from now on.
Corbat said: “While the fraud is not financially material, the conduct of the individuals involved is appalling. Now that this investigation is complete, we intend to hold the individuals who conducted these activities accountable.
"Over the last several months, we have been reviewing our franchise in Mexico and have already made significant changes to strengthen our processes and controls. We will continue to take whatever steps are necessary to make sure that every part of our global franchise lives up to our standards," Mr. Corbat concluded.