05 December 2012

Citigroup to reduce more than 11,000 positions, Close branches in Brazil, HK, Hungary and Korea

  • Close 84 branches in Brazil (14), Hong Kong (7), Hungary (4), Korea (15) & U.S. (44) 
  • Sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey & Uruguay 
  • Branch rationalization in Greece and Spain. 
New York – 05 December 2012 - Citigroup today announced a series of repositioning actions that will further reduce expenses and improve efficiency across the company. These actions will result in a reduction of more than 11,000 positions. 

Due to this repositioning, Citi expects to record pre-tax charges of approximately $1 billion in the fourth quarter of 2012 and approximately $100 million of related charges in the first half of 2013. Citi currently expects that the repositioning will generate $900 million of expense savings benefitting 2013 results and that the annual expense savings will exceed $1.1 billion annually beginning in 2014. Citi also expects the repositioning actions to have a negative impact on annual revenues of less than $300 million. 

Michael Corbat, Citi's Chief Executive Officer, said: "These actions are logical next steps in Citi's transformation. While we are committed to – and our strategy continues to leverage – our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations." 

Citi expects the repositioning activity to affect the following businesses and functions: 

Institutional Clients Group (ICG): Approximately 25 percent in Securities & Banking with another 10 percent in Transaction Services. The repositioning actions are expected to result in a reduction of approximately 1,900 positions, of which more than half are in the Operations & Technology functions that support the business. 

Global Consumer Banking (GCB): Approximately 35 percent, resulting in a reduction of approximately 6,200 positions, of which approximately 40 percent are in the Operations & Technology functions that support the business. As a result of the repositioning actions, Citi expects to either sell or significantly scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay. 

Consistent with Citi's strategy of focusing on the 150 cities, Citi will optimize its branch footprint and further concentrate its presence in major metropolitan areas. The markets affected by the reductions include Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15) and the United States (44). After this repositioning, Citi will have more than 4,000 retail branches around the world and all of the aforementioned countries will continue to be served by our institutional businesses. 

Citi Holdings is expected to eliminate approximately 350 positions and incur approximately 5 percent of the repositioning charges. Most of the repositioning charges are related to branch rationalization in Greece and Spain. 

Citi's Operations & Technology function is expected to achieve greater efficiency through increasing standardization and the use of automated processes; streamlining the organizational structure; and consolidating functions and moving certain positions to lower-cost locations. In addition, there will be a consolidation of certain locations in Citi's real estate portfolio. In addition to the reductions in Operations & Technology positions that support the ICG and GCB businesses, these actions will result in the reduction of approximately 2,300 positions that support corporate services, real estate, and Citi Holdings. 

Roughly 300 Global Functions positions will also be eliminated as a result of efficiency savings. 

Source: Citi