Citigroup Inc. said Monday that it expects to cost nearly $ 1.2 billion to $ 1.5 billion in cash in connection with the closure of its retail banking business in South Korea.
In April, the bank announced plans to withdraw its consumer business in 13 markets in Asia and EMEA (Europe, Middle East and Africa).
The move is part of Jane Fraser’s plan to streamline operations and increase bank profitability.
Banks said last month that the exit would help increase capital by releasing approximately $ 7 billion of allotted tangible common stock in the long run.
“For South Korea … the economics of shrinking consumer businesses are far more attractive than continuing to do business,” Chief Financial Officer Mark Mason said in a statement.
He said the withdrawal from South Korea would help banks release approximately $ 2 billion of allotted tangible common stock, and in the rest of the market it was in talks with potential buyers.
Citigroup will continue to maintain its organizational presence in Asia and EMEA through its four Wealth Centers in Singapore, Hong Kong, United Arab Emirates and London.
The costs associated with the closure will be incurred for the rest of 2021 and 2022, the bank said in a regulatory filing.
As part of its commitment to shrinking its business, the bank announced in August that it had agreed to sell its Australian consumer unit to the National Australia Bank for nearly $ 882.24 million.
In addition to Australia and South Korea, Citi has closed retail operations in Bahrain, China, India, Indonesia, Malaysia, Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.