Citigroup to exit retail banking in Brazil, Argentina
(Reuters) - Citigroup Inc (C.N: Quote) said it plans to exit its retail banking and credit card operations in Brazil, Argentina and Colombia as part of its efforts to cut costs and boost profitability.
Shares of the bank, which has operated in Argentina and Brazil for more than a century, were down 1.3 percent at $38.40 in early trading on Friday.
The U.S. bank, built with a series of acquisitions dating back to the 1980s, has been trying to slim down since the financial crisis to be as profitable as its rivals.
Barely six months into his tenure as the chief executive, Michael Corbat counted at least 21 markets with exceptionally low returns on assets and substandard operating efficiency as candidates for restructuring.
The Wall Street bank, like its peers, has had to resort to aggressive cost controls as near-zero interest rates, a slump in oil prices and investor cautiousness due to worries about slowing growth in China have hurt its revenue growth.
Citi's consumer business accounts for about half of the company and is heavily weighted towards U.S. credit cards.
Citi executives have been paring the company's international consumer banking operations since at least 2012.
Brazil accounted for about 9 percent of total consumer loans in Latin America at the end of 2015, while Mexico accounted for about 80 percent.
Citigroup has always struggled to compete with bigger Brazilian banks in the retail business, but things got worse in 2013 when the U.S. bank sold its profitable credit-card unit Credicard SA. Continued...