Citigroup to sell consumer business in Hungary

Along with the publishing of its third-quarter earnings report this September, Citigroup also announced its intention to exit its consumer businesses in 11 markets, including Hungary. The sale the units is to be completed in 2015.

According to the announcement, Citibank is to take "strategic actions to accelerate the transformation of Global Consumer Banking (GCB) by focusing on those markets where it has the greatest scale and growth potential."

As a result, Citigroup intends to exit its consumer businesses in 11 markets. The new consumer banking footprint will serve nearly 57 million clients in 24 markets that capture over 95% of GCB’s existing revenue base, while further simplifying its operations and improving its performance.

The affected businesses include the consumer franchises 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.

"Active sales processes are underway for the majority of the businesses, and subject to market conditions and regulatory and other approvals, the strategic actions are currently expected to be substantially completed by year-end 2015," Citi said in its earnings report.

The businesses will be reported as part of Citi Holdings as of the first quarter 2015. Citigroup’s Institutional Clients Group (ICG) will continue to serve clients in these markets.

The Hungarian financial website portfolio.hu is of the view that Citi should find a buyer for the Hungarian consumer business that is interested in extending consumer loans (and especially in credit/debit cards in which the bank excels) and also in providing services for Citibank’s premium and private banking clients.

Most of large universal banks operating in Hungary meet this condition, so a large part of them are actually potential buyers. Citibank’s objective for the following months could be to continue its consumer business activity undisturbed, in a way that maintains or even adds value to the business, even if it means acquiring new customers.