Citigroup to exit retail banking in Brazil, Argentina, and Colombia.
Citigroup Inc said it plans to exit its retail banking and credit card operations in Brazil, Argentina, and Colombia as part of its efforts to cut costs and boost profitability. The bank has operated in these countries for just over a century; it opened its first branch in Argentina in 1914, in Brazil in 1915, and in Colombia in 1916.
Citigroup has been trying to slim down since the financial crisis to be as profitable as its rivals. Barely six months into his tenure as the chief executive, Michael Corbat counted at least 21 markets with exceptionally low returns on assets and substandard operating efficiency as candidates for restructuring.
The Wall Street bank, like its peers, has had to resort to aggressive cost controls as near-zero interest rates, a slump in oil prices and investor cautiousness due to worries about slowing growth in China have hurt its revenue growth.
Citi's consumer business accounts for about half of the company and is heavily weighted towards U.S. credit cards. Citi executives have been paring the company's international consumer banking operations since at least 2012.
Brazil accounted for about 9% of Citigroup's total consumer loans in Latin America at the end of 2015, while Mexico accounted for about 80%; the bank has a 3% market share in Argentina. Citigroup has always struggled to compete with bigger Brazilian banks in the retail business, but things got worse in 2013 when the U.S. bank sold its profitable credit-card unit Credicard SA.
The businesses being sold are a part of its consumer banking operations and will be transferred to Citi Holdings. They will report financial results as part of Citi Holdings from the first quarter, the bank said. Citi Holdings is the division that holds all non-core assets that the bank is winding down or selling.
By shifting the Latin American businesses to the Citi Holdings run-off portfolio, Corbat will move closer to his target even before the units are sold or closed. At the end of the fourth quarter, Citi Holdings had $74 billion in assets, 43 percent lower than a year earlier, and represented about 4 percent of total Citigroup assets.
At: http://news.yahoo.com/citigroup-exit-retail-banking-brazil-argentina-121533337--sector.html
