Citibank grows presence in capital

Citibank hopes to save $900 million next year through job cuts and an additional amount of more than $1.1bn annually from 2014. Andrew Gombert / EPA

Citibank has announced 11,000 job cuts worldwide as it seeks almost $1 billion of new savings next year - but the Middle East will largely escape the knife, the bank says.

The US banking giant announced massive layoffs on Wednesday as it attempts to cut costs and refocus on emerging markets including the UAE, where the bank plans to open an office in Abu Dhabi.

The job losses are hoped to reap $900 million (Dh3.3 billion) of savings next year and additional savings of more than $1.1bn annually from 2014 onwards, said Michael Corbat, Citi's recently installed chief executive.

"These actions are logical next steps in Citi's transformation," he said. "And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they centre on technology, real estate or simplifying our operations."

Mr Corbat's move reverses a hiring drive begun by the former chief executive Vikram Pandit, who was unexpectedly ousted in October.

Citi said it expected to scale back or sell consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

The bank sold its consumer lending portfolio to Pakistan's Habib Bank last month, and is winding down its branches in the country.

"Consistent with Citi's strategy of focusing on the 150 cities that have the highest growth potential in consumer banking, Citi will optimise its branch footprint and further concentrate its presence in major metropolitan areas," the bank added.

The lender is currently planning for a new branch in Abu Dhabi, taking its total in the Emirates to six.

Citibank hired 52 staff last year in Bahrain, said Mazin Manna, the chief executive of Citibank Bahrain in May - at a time when international banks were fleeing the country and Citi was cutting thousands of jobs at a global level.

American banks have been increasingly aggressive in targeting the Arabian Gulf as European lenders withdraw, with JPMorgan also investing in the region.

US lenders' aspirations in the Gulf have been curtailed since the subprime meltdown of 2007 and the ensuing global financial crisis, which hammered balance sheets and led to regulatory drives such as Dodd-Frank, limiting the ability of the lenders to grow their business.

In the meantime, Asian lenders such as Industrial and Commercial Bank of China have attempted to capitalise on the weakness of European rivals that are retreating.

US banks have recently sought to delay implementation of the Basel III banking reforms so they have time to comply with the new guidelines, much to the chagrin of European rivals struggling to meet them against the background of the continent's sovereign debt crisis.