Citi reports earnings fall amid retail banking shutdown
Citibank Korea reported a double-digit earnings decline in the first quarter of this year amid weak profit growth in wealth management, as the lender is in the phased shutdown of retail banking.
According to the company, its net profit between January and March came in at 40.1 billion won ($31.23 million), down by 16.8 percent from the previous year. Even if the Korean subsidiary of the U.S. banking group enhanced a net interest margin during global monetary tightening, the company failed to enhance revenue particularly in wealth management as well as bond and foreign exchange derivatives.
“Citi’s corporate finance business has achieved a solid earnings performance despite the volatile market circumstances,” Citibank Korea CEO Yoo Myung-soon said. “We are going to do the utmost to attain a goal of sustainable growth by enhancing risk management capabilities to deal with volatile financial markets in a timely manner.”
After Citi made a group-wide decision to close down Korea’s consumer banking business in phases last year, Citibank Korea stopped sales of all consumer banking services and products on Feb. 15.
Under the decision, the lender also started accepting voluntary retirements in November. More than 2,000 employees who applied for retirement have since left the company.
This helped the company save more costs in the first quarter. The lender reported a reduced expenditure of 170.2 billion won in the same period, down by 15.4 percent from a year earlier.
The lender also offered a total loan of 22.4 trillion won to customers as of the end of March, down 9.2 percent from a year ago, hit by its ongoing exit from the retail business.
Citibank Korea is set to reshape its business portfolio shifting focus to corporate finance, so it can generate more stable revenue in the area with a long-term perspective.