Citigroup's retail units to fetch $6bn

The lender is planning to sell retail banking assets in 13 markets across the Asia-Pacific, Europe and the Middle East

The Citigroup logo atop a building in Sydney. The bank plans to exit retail banking in 13 markets globally. Bloomberg

Citigroup could fetch as much as $6 billion from the sale of retail banking assets in 13 markets across the Asia-Pacific, Europe and the Middle East as the lender forges ahead with plans to fine-tune its global branch network.

The moves are part of a bigger refresh of Citigroup’s strategy under chief executive Jane Fraser, who took the helm in March.

The sale process for Australia is the furthest along and the preliminary interest for many of the assets has come mainly from local players, sources told Bloomberg.

Exits from other markets, such as South-East Asia and Poland, are at an earlier stage, they added. The entire sales process is in its early stages, and the timeline and valuations could still change.

A Citigroup representative declined to comment on the timing and size of the sales.

“In terms of timing, look, we are already getting going and there is no dilly-dallying here,” Mr Fraser told analysts on a conference call. “We have begun the work,” he added.

Citigroup ultimately plans to exit retail-banking operations in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam, though the lender will continue to serve corporations and private-banking clients in markets it’s otherwise leaving.

The 13 markets contributed $4.2bn in revenue in 2020, Citigroup told investors last week. Still, that was chipped away by operating expenses and provisions for credit losses, which left the combined units without a profit for the year.

Following the exits, Citigroup will instead operate its consumer-banking franchise in the Asia-Pacific region, Europe, the Middle East and Africa from four wealth centres in Singapore, Hong Kong, the UAE and London.

“The decision to pursue exits for the other consumer businesses in these regions was of course difficult … each is a source of pride, with talented teams passionate about Citi and our customers,” Peter Babej, chief executive of Citigroup’s Asia-Pacific region, said in a LinkedIn post.

“However, a comprehensive review concluded that doing right for the long term requires allocating additional resources to where we provide the most differentiated solutions to clients.”

The New York-based bank has already been building out a wealth-advisory hub in Singapore. The space is the largest of its kind for the bank and has room for more than 300 relationship managers and product specialists.

“Citi’s consumer bank in Australia is an attractive and profitable business, employing highly skilled and dedicated team members,” Marc Luet, chief executive for the Australia unit, said in a statement last week.

“Citi is committed to securing the best possible outcome for our employees and our customers.”