Citigroup may opt to liquidate consumer business in Korea amid few bidders visible
이 글자크기로 변경됩니다.
(예시) 가장 빠른 뉴스가 있고 다양한 정보, 쌍방향 소통이 숨쉬는 다음뉴스를 만나보세요. 다음뉴스는 국내외 주요이슈와 실시간 속보, 문화생활 및 다양한 분야의 뉴스를 입체적으로 전달하고 있습니다.
According to multiple sources from the financial industry on Wednesday, Citibank Korea Inc. will hold a board of directors meeting next Tuesday to discuss details on its plan to close its retail business in Korea. Three options are being brought up – selling the retail banking business as a whole, breaking up into different parts such as wealth management and credit cards for the sale, or liquidating the entire consumer business.
Industry insiders are weighing on the possibility of the liquidation option given that no potential bidders have yet come forward to buy Citibank Korea’s retail business. Yoo Myung-soon, chief executive of Citibank Korea, recently confirmed to the bank’s union that it has not received any offer yet, according to sources.
Local financial holding firms and major savings banks interested in obtaining lending license are mentioned as possible buyers of Citibank’s retail business. Financial holding companies, however, are less attracted to the sale as their customer base in wealth management would overlap with that of Citibank’s.
An unnamed official from a financial holding company said bank expansion would be incongruous with the general move to streamline offline business to focus more on digital transformation and channel efficiency.
OK Savings Bank is one viable candidate but it won’t be easy for the bank to gain approval from the country’s financial authority under strict major shareholder eligibility regulations.
The hefty price tag of over 1 trillion won would be burdensome for regional financial holding companies like DGB Financial Group that want to expand their presence in the capital city.
The high labor cost is another hurdle for the M&A. The average age of employees at Citibank Korea’s consumer business is relatively higher as it has not hired fresh workers over the past 10 years. The average annual pay per person reached 112 million won last year. Severance pay would also reach 1 trillion won in total.
A senior official from the financial circle projected Citibank to opt sale of assets and liabilities in a purchase of assets and assumption of liabilities (P&A) deal.
Citibank could follow the path of HSBC that exited from retail banking in Korea in 2013. HSBC was in talks to sell its retail business to Korea Development Bank but in the end liquidated the business after it failed to agree on labor terms.
Of total 3,500 employees, 950 belong to consumer banking. There are about 1,600 more employees working at its headquarters in Yeongdeungpo, Seoul, after 90 retail branches closed in 2018. More than 2,500 employees would be targets of retirement.
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Copyright © 매일경제 & mk.co.kr. 무단 전재, 재배포 및 AI학습 이용 금지
- Imprisoned Samsung de facto chief reports to another trial on illegal hereditary succession - Pulse by Maeil Business News Korea
- Korean food names ratchet up green campaign on Earth Day - Pulse by Maeil Business News Korea
- CJ CGV to offer $269 mn convertible subordinate bonds to bolster finance - Pulse by Maeil Business News Korea
- Woori Financial’s Q1 bottom line hits record high since holding entity transition - Pulse by Maeil Business News Korea
- Doosan’s hydrogen-fueled drones deployed in Dutch offshore energy project mission - Pulse by Maeil Business News Korea
- 강경준, 상간남 피소…사랑꾼 이미지 타격 [MK픽] - 스타투데이
- 엔비디아, 시스코처럼 폭락 전철 밟을까
- “신혼여행 조식에 푹빠져” 미미♥천둥, “넓은 세상을 둘이 함께하니 너무 행복해” - MK스포
- 이찬원, 이태원 참사에 "노래 못해요" 했다가 봉변 당했다 - 스타투데이
- 양희은·양희경 자매, 오늘(4일) 모친상 - 스타투데이