Citi pulls out of consumer banking in 11 countries, profit jumps
By Anil D'Silva and David Henry
REUTERS - Citigroup Inc said it would pull out of consumer banking in 11 markets, including Japan and Egypt, as the U.S. bank with the biggest international business looks to cut persistently high costs.
In the first three quarters of 2014, the bank's operating expenses rose 11 percent, while revenue was up just 1 percent.
Even with rising costs in the third quarter, the bank managed to post better-than-expected profit, which lifted its shares as much as 3.5 percent on Tuesday.
Expenses in Citigroup's main businesses rose 11 percent in the third quarter, while revenue rose 8 percent, underscoring the work the bank still has to do to contain costs.
Much of the higher expenses in the quarter was due to funds it had to set aside for legal settlements.
Chief Finance Officer John Gerspach said on a conference call that he expects legal costs to remain elevated in the fourth quarter.
Citigroup said it would exit consumer operations in Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in Korea. It will continue to serve institutional clients in these markets.
In December 2012, Citigroup said it was withdrawing from consumer banking in five countries - Pakistan, Paraguay, Romania, Turkey and Uruguay. Continuación...