Citigroup Inc (NYSE:C) started off a study in 2012 to streamline its activities and to identify markets that aren’t posting acceptable profits compared to costs. The research had led to the introduction of several standardized accounting procedures and measures to cut down on costs.
Now, the company has announced a decision to pull out of consumer banking in 11 markets, including Egypt, Korea, and Japan, which don’t meet their profit threshold. The move is geared towards narrowing its international consumer banking services in order to focus more on the highly profitable U.S. market. Citigroup Inc (NYSE:C) currently operates in more than 100 countries, making it a huge task to streamline its activities according to each and every operating environment.
The company has faced a lot of challenges in its global consumer banking services, with some international operations characterized with fraud that lead huge losses. Just recently, divisional chief executive of its Mexican Banamex, Javier Arrigunaga, was forced to resign to give room for investigations on fraud. The bank is also disbanding Banamex’s consumer security unit over fraud allegations.
‘The conduct of the individuals involved is appalling. We intend to hold the individuals who conducted these activities accountable,” chief executive Michael Corbat said in reference to the fraud in its Mexican business.
Measures that have been undertaken by Citigroup Inc (NYSE:C) have started bearing fruits. The bank submitted its Q3 adjusted profit that was above many analysts’ expectations. Expected adjusted income was $3.26 billion, but the company posted $3.67 billion, or $1.15 per share. The stock also rose in the markets on Tuesday to close at $51.47, representing 3.1% rise.
However, Citigroup Inc (NYSE:C) still has a lot to do in order to properly streamline all its international activities and cut down on costs. The bank posted 11% increase in costs.
This article has been written by Victor Ochieng.