Citibank Plows Ahead With Shuttering China Consumer Banking Business

Citibank (China) Co. Ltd. has ceased offering insurance intermediary services as part of its broader strategy to exit the consumer banking sector in China [para. 1]. The bank's license for these services was officially canceled by China’s top financial regulator, marking a significant step in its withdrawal from consumer banking in the region [para. 2]. Additionally, Citibank has also shut down transaction functions for its personal credit card business starting from Monday, following an announcement made earlier in January [para. 3].

These developments are aligned with a global strategic shift announced by Citigroup Inc. in 2021, which involves pulling out of consumer banking across several markets globally. This decision is focused on optimizing Citigroup’s operations and will not affect its institutional businesses within China [para. 4]. As part of this exit strategy, Citigroup agreed to sell its consumer wealth portfolio in mainland China to HSBC Bank (China) Co. Ltd. This $3.6 billion deal includes customer assets and deposits from 11 major Chinese cities and is expected to be finalized in the first half of this year [para. 5].

The move away from consumer banking is likely driven by the segment's lower profitability and higher operational demands compared to institutional businesses. Consumer banking tends to generate less stable revenue and requires substantial investment in marketing and maintaining a large network of physical branches [para. 6][para. 7].