Citi pulls out of consumer banking in 11 countries, profit jumps 

Citigroup Inc said it is pulling out of consumer banking in 11 markets, including Japan and Egypt, as the U.S. bank with the biggest international business looks to cut persistently high costs.

The third-largest U.S. bank, built with a series of acquisitions spanning back to the 1980s, has been trying to slim down since the financial crisis to be as profitable as rivals. It has shed hundreds of billions of dollars of bad assets.

The latest exits were the result of studies the bank began in early 2012 to figure out which countries were not profitable enough for retail banking.

Getting results took a long time, partly because the bank did not have standardized accounting systems across all countries to compare the units’ profitability, sources familiar with the matter told Reuters in 2013.

The deliberate pace at which Chief Executive Officer Michael Corbat is fixing its business underscores how hard it is to fix a business as sprawling as Citigroup, which operates in more than 100 countries.

Chief Financial Officer John Gerspach, speaking earlier to reporters, said the bank first identified sub-standard businesses about a year-and-a-half ago, and tried to fix them before deciding to they had to go.

“Better late than never,” said stock analyst Mike Mayo of CLSA.

Expenses at Citicorp, which houses the bank’s main businesses, rose 11 percent, while revenue rose 8 percent. The increase in expenses came from money set aside to cover expected legal liabilities.

 

Source: reuters- Citi pulls out of consumer banking in 11 countries, profit jumps

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