U.S. banking giant Citigroup has announced the withdrawal of its consumer business in 11 markets, including in six Latin American countries, although the bank’s shared services center in Costa Rica will remain intact.
The bank says it has already begun selling its businesses in these markets and that the sales will be complete by the end of 2015. It is not clear how many jobs will be lost.
Some analysts are speculating that the restructure program will lead to the loss of thousands of jobs, but Citigroup has clarified that there would be no need of laying off anyone as the consumer bank business will be sold to local banks along with employees working for it.
Despite the clarification, analysts are of the belief that Citi’s shared services center in Costa Rica will have to downscale its size, as it will have smaller operations to support in the region.
The service center is currently housed in the newly opened “Citi Campus” in the Costa Rican city of Heredia. The banking group had set aside US$30 million for its expansion in the country.
The news comes almost five months after Bank of America decided to shut down its technology supporting services in Costa Rica and Mexico leading to the loss of more than 2,000 jobs.
The latest announcement means that the bank will soon discontinue retail services, including personal loans, credit cards and personal savings accounts, although Citi is expected to continue offering loans to corporate companies.
In a statement, Citigroup said the affected businesses include the “consumer franchises in Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in Korea.”
Despite exiting these markets, Citigroup’s consumer business will still serve 57 million clients in 24 countries around the world.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders,” stated the bank’s CEO Michael Corbat.