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Citi to exit consumer banking in Australia
US investment bank Citigroup has announced that it is pursuing an exit from the Australian market after 36 years.
Citi to exit consumer banking in Australia
US investment bank Citigroup has announced that it is pursuing an exit from the Australian market after 36 years.
Following a global review of its consumer operations, Citigroup has formally put its Australian consumer banking division up for sale, along with 12 other banks.
APRA’s monthly authorised deposit-taking institution figures showed that Citigroup’s Australian retail banking arm had a residential mortgage book of $4.1 billion and investor housing book of $2.44 billion.
The bank is the fifth largest in the Australian credit card market with 13 per cent, only trailing the big four banks.
Citi global’s chief executive, Jane Fraser, wasted little time announcing that the bank is exiting consumer operations in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.
“As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth,” Ms Fraser said in the release. The move to focus on the remaining markets “positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.”
Citi Australia CEO Marc Luet confirmed that Citi has commenced a sale process of its Australian consumer business, and received interest from several potential buyers. Any sale would be subject to regulatory approval.
“During the sale process, there will be no change in the way Citi serves its consumer banking customers. Consumer operations will continue to operate as they do today,” Mr Luet said.
Citi Australia’s consumer business encompasses credit cards, loans, retail banking, wealth management for high-net-worth individuals and mortgages. It operates a digital model, with more than 99 per cent of clients coming to Citi via digital channels. The bank is also a credit card provider for some of Australia’s leading brands.
Shares of the bank were down less than 1 per cent after climbing 3.1 per cent in the premarket.
The bank reported profit of $7.94 billion, or $3.62 a share.
Citigroup said it had released $3.9 billion in loan-loss reserves in the quarter, which resulted in a $2.06 billion gain after $1.75 billion in credit losses in the period. Analysts had expected a $393.4 million provision in the quarter.
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