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Citibank Korea’s retail banking exit faces stumbling block

Potential buyers are said to be interested only in the credit card and wealth management businesses

By Aug 24, 2021 (Gmt+09:00)


The sale of Citibank Korea’s consumer banking business has hit a stumbling block as the South Korean unit of Citigroup Inc. postponed its board meeting again to September amid a lack of interested parties.

According to the banking industry on Tuesday, Citibank Korea has decided not to discuss ways to sell its retail banking division at its board meeting scheduled for Aug. 26.

It’s the second time that the bank has delayed such discussions. The lender originally planned to make a decision on its exit plan in July but later delayed it until August.

The delay comes as Citibank and potential buyers who showed interest in the retail banking division are known to have differences over terms of the sale.

Some potential buyers are only interested in the division’s credit card and wealth management businesses instead of purchasing Citibank Korea’s entire consumer banking business, according to industry officials.

Industry sources said in late June that multiple financial companies started due diligence on the Citibank Korea business for a possible purchase.

Since Citigroup Chief Executive Jane Fraser on April 15 announced the US banking giant intended to pull out of 13 countries, its South Korean operations have been in contact with domestic bidders.

Citibank did not identify the bidders, but some names floated around in the market included KB Financial Group, Shinhan Financial Group and DGB Financial Group.



Industry watchers say the biggest roadblock to the sale of Citibank Korea is its high-cost structure.

Potential bidders are reportedly hesitant to take on all the staff in the consumer banking segment as a successful buyer may be asked to pay as much as 1 trillion won ($857 million) in labor costs, including the severance pay.

Earlier in June, Citibank Korea said it is also reviewing plans to break up the business for separate sales or phased liquidation if conditions are not met.

Citigroup entered South Korea's consumer banking market in 2004 by acquiring then KorAm Bank. Then, it sharply reduced the number of retail branches in 2014 and 2017, following HSBC's pullout of the Korean retail market in 2013.

HSBC exited from the Korean retail market by closing its local branches after a tussle with workers over job security.

Write to Nan-Sae Bin at

In-Soo Nam edited this article.

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