Citibank Korea to close 56 branches, focus on digital

Citibank Korea said Tuesday it would reduce its number of branches nationwide by 30 percent through closings and integration. Its decision came amid worsening profitability and growing calls for cuts in the payroll.

“The operating branches of the commercial bank will be slashed by 56 from 190 to 134 by the end of the year,” a bank spokeswoman said. “The restructuring is also part of our plan to reposition the retail banking unit to increase the usage of online banking.”

In a statement, the bank said its footprint in the country will be concentrated in six major cities including Seoul with a focus on high-quality client segments and an enhanced digital experience, consistent with its global consumer strategy.

Tuesday’s announcement fueled speculations that the U.S.-based Citigroup is mulling shuttering the overall money-losing retail service in Korea.

However, the lender dismissed the possibility of pulling its retail services out of the local market, noting the country is its third-largest retail franchise in the world, and one of its most important markets globally.

The decision came amid speculations that banks would shed more jobs and slash costs due to increasing concerns of deteriorating growth in the country’s financial industry.

Citibank Korea shed 199 workers in 2012 through a voluntary retirement program, and it plans to cut more jobs this year through another round of voluntary retirement.

“Our bank needs to adapt and lead the digital transformation. This is a big change for our franchise and we believe that this will help us compete effectively in Korea’s highly digitized market,” it added.

By Oh Kyu-wook (596story@heraldcorp.com)