Citi to exit consumer banking in Australia

Citi’s Australian retail banking business is on the block. Picture: AAP Image

Global banking major Citi is expected to confirm a well-flagged retreat from consumer banking in Australia when it releases its quarterly results in New York later Thursday, investment banking sources said.

It follows a global review of its consumer operations that have been underway since the beginning of the year, and the understanding is that the US bank has already been fielding offers for its local Australia consumer banking arm, which includes its mortgages and credit cards business.

Such a move could spark interest among Australia’s big four banks to bulk up their retail exposure. The exit would leave Citi with its investment banking business in Australia.

APRA figures show Citigroup’s Australian retail banking arm had a residential mortgage book of $4.1bn and investor housing book of $2.44bn. Its credit card business has $3.6bn in loans while the bank has a deposit book of $7.3bn.

In recent months Citigroup has been weighing up the divestment of certain units across retail banking, including South Korea, Thailand, the Philippines and Australia.

In Australia, the company has two divisions — the global consumer bank and the institutional clients group.

The global consumer bank, which serves clients in 24 countries, offers a range of retail banking services and products, including deposit accounts, foreign currency deposits and investments, credit cards, mortgages, insurance and charge cards. The review of the business is expected to take months.

Offloading the international consumer franchise would simplify Citigroup’s business at a time when the firm is under strict orders from regulators to clean up internal infrastructure and controls, according to offshore reports.

A Citi spokesman was not immediately available to comment.