By In-Soo Nam
SEOUL--Citibank Korea Inc., the South Korean unit of Citigroup
Inc., said on Tuesday it will close nearly a third of its branches,
reflecting falling profits in the country and a shift to online
banking.
The bank said it would cut the number of its branches to 134
from 190 over the next couple of months and enhance online services
for mobile and tablet platforms.
"The convergence of digital and physical channels has changed
the banking industry, with 90% of transactions for Citi Korea in
2013 occurring outside branches," Citibank Korea said in a
statement.
The closures will lead to job cuts, but numbers haven't been
decided yet, said a Citibank Korea official, who declined to be
identified.
Citi is the latest foreign financial business reduce presence or
pull out of South Korea in the face of increased competition with
bigger local players such as Woori Bank and Shinhan Bank.
In July, HSBC Holdings PLC decided to exit retail banking and
wealth management in South Korea. Standard Chartered PLC is seeking
to sell its South Korean consumer-finance business and savings bank
after last year posting a $1 billion write-down in the value of its
Korean business.
Citibank Korea posted a net profit of 219 billion won ($208
million) last year, down 8.1% from a year earlier, mainly due to an
interest-income decline and increased loan-loss reserves.
Citibank Korea said Tuesday its business in Korea now will be
concentrated in six major cities, including Seoul. It will aim its
online enhancements at the whole country.
Citigroup opened its first South Korean branch in 1967. It has
conducted three rounds of voluntary retirements over the past few
years, through which some 600 employees have left the company.
Write to In-Soo Nam at In-Soo.Nam@wsj.com
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