Citigroup, Inc. (C) plans to scale back its U.S. retail footprint to just six major metropolitan areas and limit lending mostly to wealthy customers.
Citigroup, one of the biggest recipients of government bailout money, is looking to limit its overall consumer lending in the U.S. primarily to credit cards and “jumbo” mortgages, catering largely to well-heeled customers.
The company’s executives are expected to present their plans to the board of directors in October to trim the retail branch network and concentrate mainly on the New York, Washington, D.C., Miami, Chicago, San Francisco and Los Angeles areas.
Citi has a global footprint with its branches located internationally. The company currently operates about 1,000 U.S. branches, significantly lower than the 5,000-plus run by Bank of America Corporation (BAC), Wells Fargo (WFC) and JP Morgan Chase & Co. (JPM), which expanded its network with the takeover of Washington Mutual last year.
Citi is also considering the sale of its 120 branches in Texas and is mulling whether it should maintain a major presence in cities like Boston and Philadelphia. Citi holds few deposits in those locations compared with competitors.
Citigroup, once the largest U.S. bank by assets, fell behind last year after a series of acquisitions by rivals. The bank, hurt by billions of losses and writedowns of problem loans and toxic assets, had to be rescued twice in the last year by the U.S. government. The move to scale back its branch network in the U.S. could spark criticism in Washington, since the government owns a 34% of equity stake in Citigroup.
Read the full analyst report on “C”
Read the full analyst report on “BAC”
Read the full analyst report on “JPM”
Read the full analyst report on “WFC”
Zacks Investment Research
