Bloomberg reported that Citigroup Inc. (Citi) is planning to exit retail banking in 13 markets across Asia and the Europe, Middle East and Africa region. Malaysia is also included.
Chief executive officer Jane Fraser explained the move is part of an ongoing strategic review. According to her, the group has “decided that we are going to double down on wealth“. This will be done by directing investments and resources to businesses where it has the greatest scale and growth potential.
On 15th April, Citi announced its withdrawal from consumer franchises in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. However, its institutional clients group, which houses the private bank, cash-management arm and investment-banking and trading businesses, will continue to serve clients in these markets.
“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete,” Fraser explained. The bank will instead be focusing its consumer banking business in the two regions from four wealth centres in Singapore, Hong Kong, the United Arab Emirates and London.
“This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs,” Fraser said in a statement. “We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia.”
However, Citi Malaysia Chief Executive Officer (CEO) Usman Ahmed assured that the move will not dilute the group’s long-term commitment to the country or the Asia Pacific region. Citi has been in Malaysia for over six decades with 10 different branches; six in the Klang Valley, with one each in Johor and Melaka, and two in Penang, according to its website.
“With this strategic repositioning, we will be able to further invest our resources in significantly growing our institutional business in Malaysia, which spans across corporate and investment banking, commercial banking, markets (including equity brokerage) and treasury and trade solutions,” Usman said. “In addition, our Citi Solutions Centers in Kuala Lumpur and Penang also remain an equally important operations hub for Citi, from where we execute millions of financial transactions worth over US$29 trillion annually for over 50 countries across the globe.”
He reiterated that Citi’s announcement to exit from their Consumer Bank business In Malaysia will not have an “immediate change to (their) operations” nor an “immediate impact to (their) colleagues”. “We will continue to serve our Consumer Banking customers with the same dedication as we do today,” Usman promised.
Citi Asia Pacific CEO Peter Babej added that the Asia Pacific region is an important part of the group’s global strategy. It is also a key driver of its growth and value proposition.
“We will continue to invest in our network across the region and deliver Citi’s unique global capabilities to clients across all our markets,” he added.