Citigroup Inc. (C), the U.S. lender that gets the most revenue from overseas markets, announced plans to exit consumer banking in 11 markets as Chief Executive Officer Michael Corbat seeks to simplify the firm and boost returns.
The sale of the businesses, a majority of which already are under way, are expected to be completed by the end of next year, the bank said today in a statement. The units will be moved into the lender’s collection of unwanted assets for reporting purposes in the first quarter of 2015.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders,” Corbat, 54, said in the statement. “While we have made progress optimizing these 11 consumer markets, we believe our global consumer bank will achieve stronger performance by focusing on those countries where our scale and network provide a competitive advantage.”
The actions come two years after Corbat was named CEO to replace Vikram Pandit, who made expanding into emerging markets one of his central strategies. Since taking over, Corbat has announced plans to fire 11,000 workers and pull back from consumer banking in markets with low returns including Spain, Greece and Turkey.
With today’s announcement, New York-based Citigroup will exit consumer banking in Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, Peru, Japan, Guam, the Czech Republic, Egypt and Hungary, as well as the consumer-finance business in Korea, according to the statement. It will continue to work with institutional clients in those places.
The sales will leave Citigroup with a consumer footprint that accounts for about 95 percent of current revenue from 24 markets serving 57 million customers, according to the statement.