Citigroup plans to wind down UK retail bank as part of strategic refresh

By Mehnaz Yasmin

(Reuters) -Citigroup Inc mentioned on Wednesday it was planning to wind down its retail financial institution in the UK, aiming to additional streamline operations as a part of its chief government’s technique.

The transfer would assist Citi enhance its give attention to companies to rich purchasers, the financial institution mentioned, including that it had requested sure of its retail purchasers to shift to its personal financial institution.

Winding down its UK retail financial institution, which contains only a single department, would don’t have any materials monetary affect on the corporate, the lender added.

“Retail banking usually has quite a bit worse margin profile than wealth administration. So it might make sense for them to simply give attention to this higher-return-on-capital enterprise,” mentioned Siddharth Singhai, chief funding officer of New York-based funding agency Ironhold Capital.

After taking over the highest job final yr, Chief Government Officer Jane Fraser pledged to simplify Citigroup by exiting non-core companies, together with client franchises in 13 markets in Asia, Europe, the Center East and Africa.

Fraser has been tasked with remodeling a enterprise whose share value lagged rivals like JPMorgan Chase & Co and Financial institution of America throughout her predecessor Michael Corbat’s eight years in cost.

Then again, JPMorgan and Goldman have expanded their operations within the UK lately. In Could, executives at JPMorgan mentioned its client financial institution Chase had attracted greater than half 1,000,000 prospects in Britain.

Goldman additionally presents financial savings accounts beneath its client arm Marcus in Britain.

Citi’s newest announcement comes months after the financial institution mentioned it might exit its Citibanamex client banking enterprise in Mexico, ending its 20-year retail presence within the nation.

The UK plans have been first reported by the Monetary Instances, which mentioned Citi shouldn’t be contemplating promoting its UK retail operations.

The financial institution has begun consultations with its UK retail banking workers, Citi mentioned.

(Reporting by Niket Nishant and Mehnaz Yasmin in Bengaluru; Enhancing by Shailesh Kuber and Maju Samuel)