CITIGROUP announced yesterday it will exit 13 international consumer banking markets as it joined other large banks in reporting blowout earnings amid a strengthening US economy.

Citigroup will focus its global consumer banking business on four markets: Singapore, Hong Kong, London and the United Arab Emirates.

But Citigroup will depart China, India and 11 other retail markets, where “we don’t have the scale we need to compete”, said Citi chief executive officer Jane Fraser.

Fraser, who moved into the CEO role in March, described the pivot as part of an effort to “double down” on wealth management, where the growth opportunities are better.

Most of the markets Citigroup is leaving are in Asia, where its global consumer banking business at the end of 2020 had US$6.5 billion (RM26.84 billion) in revenues, 224 retail branches and US$123.9 billion in deposits.

The number of branches is expected to dwindle as Citigroup divests the properties, according to a company official. 

The other 11 markets affected by the decision are: Australia, Bahrain, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

The move came as Citigroup reported first-quarter profits of US$7.9 billion, more than three times the level in the year-ago period. Revenues fell 7% to US$19.3 billion.

As with other large banks, Citigroup’s profits were bolstered by a strong performance in its investment banking and trading businesses, as well as the release of reserves set aside for bad loans. These benefits were offset somewhat by a drag from low interest rates.

“It’s been a better-than-expected start to the year, and we are optimistic about the macro environment,” said Citi chief executive Jane Fraser.

Citigroup reported first-quarter profits of US$7.9 billion, more than three times the level in the year-ago period. Revenues fell 7% to US$19.3 billion. 

With coronavirus vaccines and significant US fiscal stimulus spending boosting the outlook, major banks no longer expect huge loan defaults due to Covid-19.

Yesterday Bank of America reported its first-quarter profits more than doubled to US$8.1 billion, while revenues held flat at US$22.8 billion.

BofA’s results were also bolstered by a reserve release of US$2.7 billion, as well as a strong performance in investment banking and trading.

Shares of Citigroup fell 0.9% to US$72.24, while Bank of America dropped 3.4 percent to US$38.51 in afternoon trading. – AFP, April 16, 2021.