Wealth

Citi Is Exiting Retail Banking in the Philippines. Here's What That Means for Filipino Cardholders

Confused by the news? Let’s break it down.
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American investment bank Citigroup announced plans to “pursue exits from its consumer franchises in 13 markets across the two regions: Asia, and Europe, Middle East, and Africa (EMEA).” In its latest quarterly report, Citi said it will be exiting retail banking in the following markets: Australia, Bahrain, China, Indonesia, India, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.

Although Citi posted $7.9 billion in net income in Q1 of 2021, an 84 percent quarter-on-quarter increase in net income from Q4’s $4.3 billion, its Q1 Asian consumer revenues of $1.6 billion is a nine percent decrease due to lower cards revenues and lower deposit spreads

According to Jane Fraser, CEO of Citi, Citi’s retail arm does not have “the scale we need to compete” in the 13 concerned markets. The banking network said it will now focus on its key strength: institutional banking.

“We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centers, Singapore, Hong Kong, U.A.E. and London. This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs,” said Fraser.

Fraser added that the group believes focusing capital, investment dollars, and other resources in wealth management and institutional businesses will yield better results for the group and for shareholders. Citi is already building a giant 30,000-square-foot wealth advisory hub in Singapore, the largest in the bank’s network.

Citi’s institutional banking arm focuses on private banking, cash management, investment banking, and trading businesses. Citi Philippines’ institutional banking arm banks 90 percent of the top 20 largest market cap firms and over 950 multi-national companies in the country, having raised over $40 billion for Philippine clients despite the pandemic, according to Citi Philippines CEO and country officer Aftab Ahmed.

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But what does this mean for the Citi retail customer?

For the regular Citibank cardholder, the news of the exit may seem daunting, but according to Citi Philippines, customers shouldn’t be fazed as there will be “no change to the way Citi serves its customers in the Philippines as a result of this announcement.”

Citi Philippines’ retail customers includes those who avail of Citi’s retail loans, deposits, personal investments, insurance, consumer branch services, credit cards, Citigold wealth management, and other products and services. Citi Philippines runs three Citibank branches and three wealth centers in Metro Manila and Cebu.

“Consumer operations, including all branches, call centers, and offices, continue to operate as they do today,” Citi Philippines told Esquire Philippines. “We are committed to ensuring that customers continue to receive the best services, and we will continue to operate as usual.”

In short, there will be no impact to accounts and holdings with Citi, and customers can continue to use Citibank’s online and mobile banking services, credit cards, mortgage products, and other services.

“There is tremendous opportunity with this strategy refresh by Citi for us to offer a uniquely differentiated value proposition to our clients as we move into a new phase of growth and transformation focusing on our institutional franchise,” said Ahmed. “We have been in the Philippines for over 100 years (since 1902) with dedicated teams and a strong client base who have contributed to our success.”

Despite the announcement of an “exit,” Citi will continue to operate in all markets, including the Philippines.

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Anri Ichimura
Section Editor, Esquire Philippines
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