Citigroup to scale down retail operations in US
24 Sep 2009
Citigroup Inc which was looking to expand its US retail banking operations and emerge as a retail banking giant a year ago, is now scaling down its operations to focus on the New York, Washington DC, Miami, Chicago, San Francisco and Los Angeles areas, according to media reports.
The bank's management is planning to limit the US consumer lending to mainly credit cards and 'jumbo' mortgages, according to the Wall Street Journal. The report cited unnamed sources familiar with the situation.
According to the report the New York-based executives of the bank are expected to present plans to the board of directors in October on cutting the bank's retail branch network and concentrate on only a few areas.
Most of the branches of the bank re located outside the US. Citi currently operates about 1,000 US branches much less than the 5,000 strong network of the Bank of America Corp and JP Morgan Chase & Co which expanded its network by taking over Washington Mutual last year.
The paper says some Citi executives are concerned that the government, which owns a 34-per cent stake in Citi, would not approve of the branch closings.
The bank is looking to sell off 120 branches in Texas and is considering whether to continue to maintain a significant presence in cities like Boston and Philadelphia according to the report. As compared with competitors Citi has few deposits in those locations, the report said.
According to one Citi executive, the bank will not have the density of distribution that its peers have in the US.
Citigroup Inc is one of the biggest recipients of government bailout funds.
