According to a report in
The Financial Times
) operations in South Korea could face a labor strike in the near
future. The recent closure of certain Citigroup branches in the
country could cause the strike. The labor union is already in
talks with the company's management on issues related to wages
and the restructuring action being undertaken.
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Citigroup closed 22 branches in South Korea within the first nine
months of 2013. Given the sluggish loan growth and high
regulatory interferences, the company is shuttering branches in
Further, in the third quarter, Citigroup's consumer banking
revenues in Asia fell 2% year over year partly due to significant
regulatory changes in South Korea. Moreover, Citibank Korea's
third-quarter net income decreased 53% from the prior-year
quarter to Won27.9 billion ($26 million). This was the weakest
performance for the unit since 2006.
Though management expects revenues in South Korea to begin
stabilizing from early next year, Citigroup's repositioning
efforts are expected to be a drag on overall revenues for Asia
Apart from Citigroup, many other global banks are trimming their
operations in South Korea. Earlier this month, U.K.-based
Standard Chartered PLC
) announced plans to slash its number of branches in the country
by 25% to 250. Further, in Jul 2013,
HSBC Holdings plc
) declared the decision to exit its retail banking and wealth
management businesses in South Korea.
In Mar 2013, Citigroup unveiled its financial targets to be
achieved by 2015. Moreover, the company announced restructuring
initiatives in the markets where it operates. Though streamlining
of operations and efficiency improvement would help the company
in accomplishing its goals, a possible industrial strike could be
Currently, Citigroup carries a Zacks Rank #3 (Hold). A better
performing major global bank is
) with a Zacks Rank #2 (Buy).