Pressures From The Retail Business Are The Cause For Citigroup Leaving 13 Countries, Including Indonesia

Illustration (Photo: By Courtesy)

JAKARTA - Citigroup CEO Jane Fraser decided to stop retail banking activities in 13 countries in Europe, Asia, the Middle East, and Africa.

This step is based on the performance of the consumer sector which is quite depressed even though it is claimed that it is still at a manageable level.

"We have good business activities, but we do not have a good chance to be able to compete more competitively with local financial institutions", Jane Fraser said in a statement as quoted on Friday, April 16.

Quoting the latest Citigroup financial report in the first quarter of 2021, it was stated that the company from the United States made a net profit of USD 19.3 billion. This achievement was supported by a net income of USD 7.9 billion.

The real problem stems from the deeply depressed performance of Citigroup's retail banking globally. It is known that this sector contracted 14 percent year-on-year (yoy) to USD 7.03 billion in the first three months of 2021.

The book is lower than the same period in 2020 which was recorded at USD 8.17 billion.

The retail performance, which was quite deep, was quite alarming compared to other sectors, such as the institutional banking sector which was minus 2 percent.

Overall, Citigroup's revenue fell 7 percent yoy to around USD 19 billion at the close of the first quarter of 2021 from the previous USD 20 billion in the first quarter of 2020.

However, compared to the previous trimester, namely the fourth quarter of 2020, the realization of the early 2021 period has increased considerably.

Meanwhile, the thirteen countries Citi intends to leave are Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.

"We only serve institutional clients in that country because it is important to maintain a global network", concluded Fraser.