The Korea Herald


Citibank Korea postpones decision on exit plan for second time

By Jung Min-kyung

Published : Aug. 24, 2021 - 15:08

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(Yonhap) (Yonhap)
Citibank Korea has decided for the second time to delay confirming its retail business exit plan, after apparently failing to agree on sales terms with potential buyers, industry sources said Tuesday.

Following Citigroup’s decision in April to exit the consumer banking business in 13 global markets, including South Korea, local subsidiary Citibank Korea initially planned to confirm the exit plan in July. The firm then postponed the confirmation until a board meeting scheduled for Tuesday, only to delay it again until September.

So far, Citibank Korea has said, more than four companies have submitted letters of intention. But the bank has yet to disclose the list of potential bidders.

The potential buyers are reportedly seeking to acquire only key parts of the retail division, such as wealth management and credit card services, instead of the entire unit.

Also, the potential buyers were pessimistic about a plan to retain all current employees, Citibank Korea said in May.

While the leadership at Citibank Korea is reportedly more open to the option of partial sales, its unionized workers are adamantly insisting that the division be sold intact.

The option of a complete pullout from the market in phases is also on the table, Citibank Korea mentioned earlier, but onlookers expect that to be a last resort.

A Citibank Korea spokesperson refused to comment on the details of the latest delay, merely saying the firm was doing its best to come up with the best result.

“This is actually not bad news for us,” a Citibank Korea union member told The Korea Herald, requesting anonymity.

“It means that the company is unwilling to sell off only parts of its retail business if the conditions do not meet their demands,” the unionist added.

The unionist pointed to the case of Citibank Colombia, saying that above all, timing was crucial. Citigroup suspended the sale of its consumer banking operations in Colombia in 2016, after deciding to exit the retail banking market there but failing to find suitable buyers. Citigroup later revived the plan and successfully sold it off to Canadian banking giant Scotiabank in 2018.

The official added that signs of a mass employee turnover or mass requests for voluntary retirement had yet to surface.

As of end-2020, Citibank Korea’s total workforce came to 3,500, and 2,500 of those workers belonged to its retail division.

The US banking giant opened its first branch in Korea in 1967 and launched Citibank Korea in 2004.