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Citibank Indonesia to phase out consumer banking
Indonesia is one of 13 consumer banking markets Citibank is exiting as part of Citigroup's global downsizing strategy.
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rivate lender Citibank Indonesia announced on Sunday that it would start the process of selling its consumer banking arm as part of parent company Citigroup’s global downsizing strategy.
Citibank Indonesia's consumer business includes credit cards and unsecured loans, as well as wealth management and digital banking services.
Citibank Indonesia CEO Batara Sianturi said it would carry out the exit process “prudently and systematically” in coordination with stakeholders, including the Financial Services Authority (OJK) and Bank Indonesia.
“During the selling process, our consumer banking operations, such as branch offices, call centers and digital services, will operate normally,” Batara said in a press statement on April 18.
Meanwhile, the bank will continue providing corporate and investment banking services through Citi’s Institutional Clients Group (ICG) as well as capital market services through PT Citigroup Sekuritas Indonesia.
Indonesia is among the 13 consumer banking markets around the world that New York-based Citigroup plans to exit in a move intended to increase the profitability of consumer banking arm that booked a US$ 2.17 billion net income in the first quarter of 2021, turning around a loss from the same period last year, led by recovery in the North American retail network.
Most of the planned exit markets are in the Asia Pacific, including China, India, Australia, South Korea, Malaysia, the Philippines and Vietnam.
“While [these] 13 markets have excellent businesses, we don’t have the scale we need to compete,” Citi Chief Executive Jane Fraser said in a press statement on April 15. Fraser added that Citigroup would shift its focus to its four wealth management hubs, namely Singapore, Hong Kong, the United Arab Emirates and the United Kingdom.
Read also: Citigroup trims global consumer banking profile, RI, Malaysia affected
Established in Indonesia in 1968, Citibank claims it has served 90 percent of 20 top Indonesian corporations to date.
But the bank’s local consumer segment has been affected by the pandemic as seen in the decline in credit card transactions, especially in travel and entertainment, Batara told Kontan.co.id.
Citibank Indonesia last year recorded Rp 1.9 trillion (US$130 million) in third-quarter profits, a 19.8 percent year-on-year decline compared to third-quarter profits of Rp 2.37 trillion in 2019.
