US-based Citigroup to raise $6bn through unit sale

By Shilpa Annie Joseph, Desk Reporter
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American multinational investment bank and financial services company Citigroup could raise up to $6 billion by selling retail banking assets in 13 markets across Asia-Pacific, Europe, and the Middle East, as it moves forward with plans to fine-tune its global branch network.

The changes are part of a larger strategy refresh by Citigroup under new CEO Jane Fraser, who took over in March.

According to the media reports, the sale process for Australia is the most advanced with tentative demand for many of the properties coming mostly from domestic players. The exits from other markets, such as South-East Asia and Poland, are at a more advanced level.

The entire sales process is still in its infancy, and the timeline and valuations can change. A Citigroup representative has not provided any comment on the timing or size of the sale. “In terms of timing, look, we are already getting going and there is no dilly-dallying here,” Mr. Fraser told.

Citigroup intends to exit retail banking operations in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam in the long run, while it will continue to support companies and private banking clients in those markets.

Citigroup told investors last week that the 13 markets generated $4.2 billion in revenue in 2020. Still, that was chipped away by operating expenses and provisions for credit losses, which left the combined units without a profit for the year.

Following the exits, Citigroup will now run its consumer banking franchise in the Asia-Pacific region, Europe, the Middle East, and Africa from four wealth centers in Singapore, Hong Kong, the UAE, and London.

“The decision to pursue exits for the other consumer businesses in these regions was, of course, difficult … each is a source of pride, with talented teams passionate about Citi and our customers,” Peter Babej, chief executive of Citigroup’s Asia-Pacific region, said in a LinkedIn post.

“However, a comprehensive review concluded that doing right for the long term requires allocating additional resources to where we provide the most differentiated solutions to clients,” Mr. Babej added.

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