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Citigroup to cut consumer banking presence in some cities

Citigroup is said to be scaling back its presence in consumer banking segment, especially in those markets where it does not have enough branches to be competitive.

Citigroup

From targeting 120 of the top 150 cities of the world, in 2014 the firm scaled back to approximately 100 cities, where it believes it has the greatest potential, reports Reuters.

The company is said to be pulling out from cities such as Tokyo, Lima, Panama City, and Houston.

In US alone, the firm is focusing only on six cities, from the erstwhile 14, according to the news agency.

Jonathan Larsen, who oversees Citigroup’s overseas retail branch business, told Reuters that the bank will continue to re-assess its holdings.

"We have to make sure that we are not subsidizing marginal operations for long periods," Larsen said.

The bank’s strategy will work with fewer cities, he added.

The pulling down of branches globally is expected to allow Citigroup to place its resources where they can be productive.

In the near term, the scaling back will have an impact on the firm’s earnings.

In the fourth quarter, Citigroup is expected to book restructuring charges of $800m and in the last two years, chief executive Michael Corbat has announced $2.4bn of additional restructuring costs.

The latest move comes after the firm increased its minimum thresholds for performance and prospects in consumer segment markets in 2014, reports Reuters.

Including branch banking and credit cards, the company’s global consumer business, accounts for half of the company’s revenue from its core operations.


Image: Citigroup EMEA headquarters in Canary Wharf, London. Photo: courtesy of Voyager