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Citigroup hopes to offload some Asia assets in the next month


Citi
Under Jane Fraser, Citigroup is exiting many consumer banking markets. Photo: Reuters

US banking giant’s finance chief says a slowdown in institutional businesses and higher expenses would affect the group’s bottom line

(AF) Citigroup expects to find a buyer for some of its Asian retail operations in the next month, as the US banking group’s finance chief forecast that a strong economic recovery this year might not translate into better profits.

Mark Mason, Citi’s chief financial officer, said in an interview on Tuesday that a slowdown in institutional businesses and higher expenses would affect the bank’s bottom line.

He said a number of potential buyers had emerged for Citi’s consumer operations in Asia, as well as those markets in Europe and the Middle East that the bank is exiting.

In April, Citigroup said it would offload its consumer franchises in Australia, China, India, Indonesia, South Korea, Malaysia, the Philippines, Taiwan, Thailand and Vietnam. It would also sell off its consumer operations in Bahrain, Poland and Russia.

The move is in keeping with chief executive Jane Fraser’s strategy of bringing Citigroup’s profitability in line with that of its rivals. The selloff announcement came a little more than a month after Fraser, who formerly led the bank’s retail division, took over.

“We don’t have the scale we need to compete,” Fraser said, adding: “I’m very clear around our priorities, which is closing the return gap with our peers.”

“It’s been a consumer-led recovery,” Mason said, particularly “driven by the significant take-up that we’ve seen as it relates to vaccinations”.

MARKET LIQUIDITY

The bank, however, does not expect a sizeable rise in corporate loan growth for the rest of the year.

“Given the liquidity that’s in the market and all the debt issuance activity that we saw last year, I’m not expecting corporate loan growth in the balance of the year,” Mason said.

He also hinted at higher-than-expected expenses for the bank in the quarter, as the lender continued to invest in areas like investment banking, wealth management and others.

Investment banking revenues in the quarter are likely to be down in the low to mid-single digit range, Mason said, adding that the pipeline in the segment remains strong.

The bank has been a leader in raising money for Special Purpose Acquisition Companies.

Citigroup, one of the world’s largest currency trading banks, is considering taking its first steps into cryptocurrency markets after a surge in interest from clients.

The group is the latest banking giant to consider pushing into the new markets, Itay Tuchman, its global head of foreign exchange, said in May.

With reporting by Reuters

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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