Citigroup Exits Argentina/Brazil Retail Banking

Citigroup is looking to get out of retail banking operations in Argentina and Brazil, two countries where it has had a retail and branch presence for more than a century.

Bloomberg reported the news on Thursday (Feb. 18), citing an unnamed source familiar with the banking giant’s intent. The exit will be official in the next few weeks, the newswire said.

As the Bloomberg report stated, the strategy from the top corporate ranks has been focused, as directed by CEO Michael Corbat, on bringing retail operations to a halt in some areas in an effort to reign in operating costs. There were Citigroup exits in other markets south of the United States, including a number in Central and Latin America, such as Peru and Costa Rica.

Institutional operations in Brazil and Argentina will still remain, said Bloomberg, a partial exit that has some precedent in Japan.

The exits would winnow down the current global tally of 24 markets. There are 71 branches in Brazil, where the firm has been since 1915. That was predated by Argentina by one year, where the firm made its first foray outside the United States.

Assets managed by Citi in Argentina topped $3 billion, while in Brazil they stood at $20 billion.

Argentina has been beset with stagnant economic growth in the wake of currency controls, and it has left lingering memories after a 2001 debt default. There were also disputes over Citi’s financial relationship with a hedge fund there and a series of bond payments that the government said were illegal.

Other banks, such as Deutsche Bank, have been scaling back from Brazil, which is in the midst of grappling with recessionary pressures, where the economy has been struggling with the expectation that this recession will be the worst in a century.