Citigroup on Thursday offered most of its consumer businesses for sale in Asia and Eastern Europe, saying it would focus on wealth management in the regions, as it indicates a declining revenue in its lending.
“As a result of the ongoing renewal of our strategy, we have decided that we will double our wealth,” said Jane Fraser, who became CEO in February. “Although the other 13 markets have excellent businesses, we do not have the scale we need to compete.”
Citigroup has said it will sell its consumer businesses in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.
The move is the second major change for Citi’s consumer bank this year. In January, the bank said it would move wealth management to its global consumer industry and pull it out of its group of institutional customers.
The exits have no impact on the bank’s institutional customers in those countries, the bank said.
The remaining consumer and wealth management businesses will consist of four hubs: Singapore, Hong Kong, the United Arab Emirates and London.
Citi, the third-largest U.S. credit provider by assets, also reported a 7% drop in revenue in the first quarter, mainly due to low interest rates and lower demand for loans, which offset the strong growth in investment bank fees.
Its loan book shrank by 8 percent during the quarter, and revenue in North American branded credit cards, once the main driver of growth in its global consumer bank, recorded a third consecutive quarter of double-digit declines.
The bank has warned that fixed income could fall to 4 per cent this year, while spending will rise to address the shortcomings caused by regulators.
Nevertheless, profit in the first quarter more than tripled compared to last year, as an improving economy and lower lending volume enabled it to release $ 3.8 billion of its potential bad loan reserves. To date, in the early days of the pandemic, the bank has released more than half of the $ 10.5 billion it set aside for loan losses.
Investment banking was bright. Fees rose 46 percent, but underperformed Goldman Sachs and Bank of America, which underperformed their banking businesses, which grew by 73 percent and 62 percent, respectively.
Citigroup had net income of $ 7.9 billion or $ 3.62 per share, compared to $ 2.5 billion, or $ 1.06 per share a year earlier.