Citi to take $1.5bn charge shuttering South Korean retail banking business
Major US bank Citi has said it may have to take a charge of up to $1.5 billion as it shutters its consumer banking business in South Korea, Reuters reports.
The charge related to the closure will affect the bank’s operations through the rest of 2021 and 2022, Citi said in a regulatory filing.
Citi first announced exit plans in April, with 13 markets across Asia and EMEA in the firing line. It comes as part of a plan to streamline operations and boost the bank’s profitability.
Citi chief financial officer, Mark Mason, confirmed the move on Monday in a statement.
Mason says the wind-down of the Korea Consumer Bank is part of Citi’s strategic plan to focus its attention on four wealth centres: Hong Kong, Singapore, London and the UAE.
Citi will continue to invest in and grow its institutional franchises in Asia and EMEA, he adds.
“We continue to have good conversations with potential buyers of our consumer businesses across the two regions,” Mason says.
“In terms of Korea, however, the economics of winding down the consumer business are much more attractive than continuing to run the business — even including the cost of the voluntary retirement program — given the reduced future operating costs and the release of roughly $2 billion of allocated tangible common equity over time.”