Citigroup to exit retail banking in 11 markets
NEW YORK— Citigroup customers across Central America and in parts of Eastern Europe will be looking for a new place to bank next year.
Citigroup said Tuesday that it will bow out of the retail banking business in 11 markets, part of its ongoing effort since the financial crisis to restructure and slim down.
The news came as the bank announced third-quarter earnings.
Citi said the impact would primarily be in smaller countries in Latin America: Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, and Peru.
It will also exit consumer banking in Egypt, Japan, the Czech Republic, Hungary, and Guam.
The bank is exiting those areas to focus on market share and growth potential in places where it thinks it can be competitive, chief executive Michael Corbat said in a statement. It will still have institutional banking operations in those areas.
‘‘I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders,’’ Corbat said.
The bank said sales of the businesses were underway in the majority of the markets affected. Citi expects the sales to be substantially complete by the end of 2015.
Despite Tuesday’s announcement, Citi will still be the most internationally focused of the big US banks, serving about 57 million clients in 24 countries or markets, it said.
Citi has been selling assets and consolidating operations for several years, under Corbat as well as former CEO Vikram Pandit. The company sold the rest of its Smith Barney retail brokerage business to Morgan Stanley in 2012. Earlier this year, it sold its consumer banking businesses in Greece and Spain.
Citi’s announcement came at the same time the company posted its quarterly financial results. The bank reported earnings of $3.44 billion, or $1.07 a share, for the three months ended Sept. 30. Stripping out one-time items, Citi earned an adjusted profit of $3.67 billion, or $1.15 a share.
Last year, the company earned $3.23 billion, or $1 a share.
Revenue rose 9 percent to $19.6 billion from $17.9 billion a year earlier.
The results exceeded Wall Street’s expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.12 a share.
Citigroup stock rose $1.57, or 3.2 percent, to $51.47.
In a separate announcement, Citi said it discovered $15 million in fraud following an investigation into the bank’s Banamex unit.
The fraud came from personal security services that were provided to individuals outside the bank. The bank said it will use its internal security division going forward.
In February, Citi disclosed that its Banamex division had lost $400 million as a result of fraud related to a Mexican oil services company known as Oceanografia. The bank lent Oceanografia money based on invoices that were later found to be fake. The $15 million announcement came as a result of an investigation into the Oceanografia incident.
Citigroup was one of a few large banks to report their quarterly results Tuesday.
JPMorgan Chase reported earnings of $5.6 billion, or $1.36 share, compared with a loss of $380 million, or 17 cents a share, in the same period a year before. The results missed expectations.
Wells Fargo said it had a third-quarter profit of $5.73 billion, or $1.02 per share, meeting Wall Street’s expectations.