Citigroup (C) Plans to Focus on Wealth Management in the UK

Citigroup Inc. C is planning to exit its retail banking business in the U.K. and focus on personal banking and wealth management businesses in the country. This is a strategic fit for the company, given that the U.K. is a key wealth hub for Citigroup and a significant global center for its institutional business.

The plan will aid the wall street biggie to cater to clients requiring comprehensive advice on wealth management and would leverage on private banking and investment services. The bank will ask some of its retail clients to shift to its private bank.

If the proposal materializes, Citigroup’s UK retail banking business will shut operations and most clients will not be affected until 2023. The company noted that it started consulting with employees of its retail bank in the U.K. about the proposal.

While the company plans to exit its UK retail bank, the business is small, consisting of a single branch at its EMEA headquarters in Canary Wharf. If implemented, the exit will not have any material financial impact on Citigroup.

The exit from retail banking aligns with its strategic refresh plan to emphasize growth in core businesses by streamlining operations internationally. Citigroup will exit its consumer banking and commercial banking operations in Russia while seeking to sell some of the consumer loan portfolios. The winding down process will commence in third-quarter 2022 and will likely take 18 months to complete.

Also, in January 2022, the company revealed plans to exit the consumer, small business and middle-market banking operations in Mexico. This is in addition to its major strategic action announced in April 2021 to exit the consumer banking business in 13 markets across Asia and EMEA, including Australia, Bahrain, China, India, Indonesia and Korea. Since then, the company has signed deals to sell nine consumer businesses in Australia, Indonesia, Malaysia, Philippines, Thailand, Taiwan, Vietnam, India and Bahrain, and has completed the sale of its Australia and Philippines consumer businesses.

It also plans to gradually wind down its consumer banking business in South Korea. Such exits will free up capital and help the company pursue investments in wealth management operations in Singapore, Hong Kong, the UAE and London to stoke growth. Citigroup anticipates the release of $12 billion (in aggregate) of allocated tangible common equity over time from such market exits.

Shares of the Zacks Rank #3 (Hold) company have edged down 0.1% over the past three months compared with a decline of 4.9% for the industry it belongs to. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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C’s move to shutter its retail banking business in the U.K. comes in stark contrast as its rivals JPMorgan Chase JPM and Goldman Sachs GS increase their offerings. In recent years, JPMorgan and Goldman Sachs have launched digital banks in the U.K., as they aim to cater to international consumers at lower costs without the costs of maintaining a branch network.

JPMorgan’s consumer bank attracted decent business in Britain. Goldman Sachs offers savings accounts under its consumer arm Marcus in the country.

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