Citi architect criticises its retreat
John Reed, one of the architects of the modern-day Citigroup, has criticised his successors’ decision to shut down its consumer operations in 11 international markets, painting the move as shortsighted.
“They’re looking at the business differently, they seem to be dismantling it, they don’t get [understand] the synergies,” Mr Reed, 75, told the Financial Times. “We ran the business on a customer basis; there was tremendous learning around the world,” he said.
Last week, chief executive Mike Corbat said Citi would withdraw from consumer operations in Egypt, Hungary, Japan and eight smaller markets.
Citi has cut its consumer banking network almost in half to 24 countries since 2012, but says it will still cover 57m clients accounting for over 95 per cent of the existing revenue base. Including its corporate and investment bank, Citi will still be in 100 countries.
“While these consumer franchises have real value, we didn’t see a path for meaningful return,” Mr Corbat told analysts at its third-quarter results.
Mr Reed spent 35 years at Citi and its predecessor banks, and agreed to the 1998 merger of Citicorp and Sandy Weill’s Travelers that created Citigroup. His successors have pared down former Travelers businesses such as its subprime lending arm, making it look more like the Citicorp Mr Reed ran.
Source: FT- Citi architect criticises its retreat
