Citigroup Saying ‘Adios’ to Retail Banking in LatAm
Post on February 22, 2016, 1:48 pm by the-victoria-law-group 0 Comments
Citigroup Inc., the bank that gets more revenue from outside its home market than any of its U.S. competitors, plans to sell retail-banking and credit-card operations in Brazil, Argentina and Colombia.
The businesses will be moved into the Citi Holdings unit, which houses the company’s unwanted assets, effective this quarter, the New York-based company said Friday in a statement.
“Citi will maintain a strong presence in Brazil, Argentina and Colombia in order to continue serving its many corporate and institutional clients in these markets,” Citigroup said in the statement.
Chief Executive Officer Mike Corbat has been scaling back Citigroup’s retail footprint to simplify the company, cut costs and boost returns. In October 2014, Corbat said the firm was dropping consumer banking in 11 markets, including Peru, Costa Rica and four others in Central and South America. With Friday’s announcement, Corbat takes another step away from his predecessor, Vikram Pandit, who made expanding into emerging markets one of his central strategies.
“They’d been in these countries for over 100 years and it says to me that there are no sacred cows at Citigroup and they are serious about trying to change the corporate culture,” Charles Peabody, an analyst at Portales Partners LLC, said in an interview. Peabody changed his rating on Citigroup to a buy from hold in January.
Citigroup operated branch networks in 24 countries at year-end, down from 40 as recently as March 2012. The decision to leave Argentina, Brazil and Colombia retail banking is one of the most sweeping since consumer-banking chief Stephen Bird took over in June from Manuel Medina-Mora, who retired. Jane Fraser, who had also been in the running for Medina-Mora’s job, runs the Latin America region from Miami.
The bank’s plans to exit retail banking in Argentina and Brazil were reported Thursday by Bloomberg News, citing a person familiar with the matter.
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