Citi Provides Update on Global Consumer Bank Strategic Actions

Rhea-AI Summary

Citi has announced the wind-down of its Korean consumer banking operations as part of a strategic refocus on its Global Consumer Bank in Asia and EMEA. This decision will release approximately $7 billion in allocated tangible common equity, with $2 billion from Korea. The exit is expected to streamline operations towards four wealth centers: Singapore, Hong Kong, UAE, and London. Citi will continue to support existing clients until contract expiration while halting new consumer banking product sales.

Positive

• Projected $7 billion release of allocated tangible common equity from consumer franchise exits.
• Focusing resources on high-return institutional businesses and wealth management.
• Strong interest from potential buyers for consumer franchises.

Negative

• Exit from Korea signifies a reduction in market presence.
• Immediate halt on new sales for consumer banking products may limit future revenue.

Citi to Wind Down Korean Consumer Banking Operations

NEW YORK--(BUSINESS WIRE)-- Citi today announced that it will wind down its consumer banking business in Korea as part of the strategic actions the bank is taking to refocus its Global Consumer Bank presence in Asia and EMEA on four wealth centers—Singapore, Hong Kong, the UAE and London—and pursue exits from its consumer franchises in 13 markets across the two regions. Even with the wind-down, the exits from these consumer franchises are accretive to capital and are still expected to release approximately $7 billion of allocated tangible common equity over time, $2 billion of which is related to the Korea wind-down.

Across its remaining consumer markets in the regions, Citi is pursuing options including consumer franchise sales, with a focus on optimal results for its people, clients and shareholders. Conversations with potential buyers continue with strong interest from a broad range of bidders.

“We continue to make progress on our strategy refresh, allowing us to increase the capital we return to our shareholders over time,” said Mark Mason, Citi’s Chief Financial Officer. “In Asia and EMEA, we will focus our resources on higher-returning institutional businesses and double down in wealth, where we have distinct competitive advantages and meaningful potential for growth.”

An amendment to the recently filed Form 8-K Current Report will be filed in connection with the wind-down plan as soon as Citi is able to reasonably estimate the wind-down and related charges consisting of voluntary termination benefits and related costs.

The decision to wind down consumer operations in Korea received all necessary Board approvals. Citi Korea Inc will work closely with regulators during the process to ensure minimal inconvenience for clients. Citi Korea Inc will provide its services without interruption for existing contracts until expiration or termination of those contracts, while new sales for all consumer banking products will be stopped.

Citi will continue to contribute to the development of the Korean financial market as it invests in and grows its market-leading Institutional franchise in the country. Citi Korea’s institutional business provides a comprehensive range of investment and banking services to corporates, banks, governments and institutional investors in Korea including capital markets and corporate advisory.

Certain statements in this release are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors. These factors include, among others, the successful wind down and closure of the Korea consumer banking business, including within the expected timeframe, macroeconomic and local market conditions, consumer preferences, and the precautionary statements included in this release. These factors also consist of those contained in Citi’s filings with the SEC, including without limitation the “Risk Factors” section of Citi’s 2020 Form 10-K. Any forward-looking statements made by or on behalf of Citi speak only as to the date they are made, and Citi does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Citigroup, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citigroup provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005447/en/

Media: Danielle Romero-Apsilos (212) 816-2264

Media: Richard Tesvich +852 2868 7689

Investors: Jennifer Landis (212) 559-2718

Fixed Income Investors: Thomas Rogers (212) 559-5091

Source: Citi

FAQ

What is Citi's recent announcement regarding its operations in Korea?

Citi announced it will wind down its consumer banking operations in Korea as part of a strategic refocus in Asia and EMEA.

How much capital is Citi expected to release from its Korean operations?

Citi expects to release approximately $7 billion in allocated tangible common equity from its consumer franchise exits, including $2 billion from Korea.

What new strategy is Citi implementing following the wind-down in Korea?

Citi is refocusing on four wealth centers: Singapore, Hong Kong, UAE, and London, and increasing capital returns to shareholders.

Will existing clients in Korea be affected by the wind-down?

Existing clients will continue to receive services until their contracts expire, but new consumer banking product sales will stop.