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Citigroup plans to wind down UK retail bank as part of strategic refresh

·2 min read
FILE PHOTO: The Citigroup Inc logo is seen at the SIBOS banking and financial conference in Toronto

By Mehnaz Yasmin

(Reuters) -Citigroup Inc said on Wednesday it was planning to wind down its retail bank in the United Kingdom, aiming to further streamline operations as part of its chief executive's strategy.

The move would help Citi improve its focus on services to wealthy clients, the bank said, adding that it had asked certain of its retail clients to shift to its private bank.

Winding down its UK retail bank, which comprises just a single branch, would have no material financial impact on the company, the lender added.

"Retail banking typically has a lot worse margin profile than wealth management. So it would make sense for them to just focus on this higher-return-on-capital business," said Siddharth Singhai, chief investment officer of New York-based investment firm Ironhold Capital.

After taking up the top job last year, Chief Executive Officer Jane Fraser pledged to simplify Citigroup by exiting non-core businesses, including consumer franchises in 13 markets in Asia, Europe, the Middle East and Africa.

Fraser has been tasked with transforming a business whose share price lagged rivals like JPMorgan Chase & Co and Bank of America during her predecessor Michael Corbat's eight years in charge.

On the other hand, JPMorgan and Goldman have expanded their operations in the UK in recent years. In May, executives at JPMorgan said its consumer bank Chase had attracted more than half a million customers in Britain.

Goldman also offers savings accounts under its consumer arm Marcus in Britain.

Citi's latest announcement comes months after the bank said it would exit its Citibanamex consumer banking business in Mexico, ending its 20-year retail presence in the country.

The UK plans were first reported by the Financial Times, which said Citi is not considering selling its UK retail operations.

The bank has begun consultations with its UK retail banking staff, Citi said.

(Reporting by Niket Nishant and Mehnaz Yasmin in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)