The 12 other affected consumer franchises are in Australia, Bahrain, China, India, Indonesia, South Korea, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.
MIDF Amanah Investment Bank Bhd head of research Imran Yassin Md Yusof said Citigroup’s move was more of an isolated case and due to the overall strategy that the group was taking rather than any sort of industry trend.
“In fact, this may tone down some of the competitive landscape in the sector, but whether this will induce a trend of mergers in the industry, we believe that this will not be the case.
“It really depends on the individual bank’s strategy, risk appetite and assessment of the Malaysian market more than anything else,” he said.
Citigroup, in a statement yesterday, announced strategic actions to double down on wealth management and will operate the consumer banking franchise in Asia and Europe, the Middle East and Africa (EMEA) solely from four wealth centres – Singapore, Hong Kong, the United Arab Emirates, and London.
Commenting on this, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Citigroup’s exit move was motivated by the need to stay relevant, while keeping their economies of scale within a reasonable amount of cost amid the challenging environment both from the economic landscape and the regulatory ecosystem.
“The proliferation of technology has allowed more simplified transaction processes with greater security and productivity,” he said.
Afzanizam shared that the pandemic has clearly shown the challenges, and simultaneously the opportunities to serve clients better, and understanding their needs is of paramount importance.
Customers these days have become more demanding and learned, he said, and would ask for more advice especially on how the bank can assist them in achieving their financial goals.
“Therefore, it makes sense to focus on wealth management-related products and services and having a physical branch may no longer be a prerequisite to serve the clients.
“I think this would be the key consideration for Citigroup’s decision. It’s about treading a fine line between cost and revenue in the most practical sense,” he added.
Citi Malaysia CEO Usman Ahmed said yesterday that Citi has been in Malaysia for over 60 years and the exit does not in any way dilute its long-term commitment to Malaysia or the Asia-Pacific region.
“With this strategic repositioning, we will be able to further invest our resources in significantly growing institutional business in Malaysia.
“In addition, our Citi solutions centres in Kuala Lumpur and Penang also remain an equally important operations hub for Citi, from where we execute millions of financial transactions worth over US$29 trillion annually for over 50 countries across the globe,” he said.
Usman added that there would be no immediate change to operations and staffing requirements as a result of the announcement.
For the first quarter of 2021, the group reported a net income of US$7.9 billion or US$3.62 per diluted share on revenues of US$19.3 billion.