Photo = Yonhap News
“You say Citibank Korea withdraws? It’s worth it these days.”
On the 20th, in an article published by Bloomberg News, the banknote was fluffing. It was news that Citibank, a leading foreign bank that entered the country, was considering withdrawal from the country. There was even a voice that predicted where the candidate for the future acquisition would be.
Nothing has been confirmed yet. Bloomberg, citing internal sources, reported that Citigroup is considering selling its retail banking business in the Asia-Pacific region. Citigroup has put an official position, “We will consider many alternatives and make a long deliberate decision.” An official at Citibank Korea explained, “We have not received any special plans from the headquarters other than the report.”
It is not the first time that Citibank Korea has been caught up in rumors of withdrawal. It was speculated that in 2014 and 2017, it would be a departure from Korea. This is because Citibank has consolidated stores in stages. The number of domestic stores decreased from 133 in 2016 to 39 as of this year.
Nevertheless, other banks seem to be making a sense of this withdrawal. The industry says that the environment surrounding the banking industry is worse than ever. The first reason is that the bank’s position has declined due to the unprecedented low interest rate and rapid financial non-face-to-face. Citibank Korea has also reduced its stores and reorganized its business structure to focus on asset management (WM) and corporate finance (IB), but it has not improved profitability further. Until the third quarter of last year, net profit reached 161.1 billion won, a 38% decrease from the same period last year.
It is pointed out that excessive’government finance’, which is difficult to find in developed countries, is also a reason for global financial companies to turn their backs. In particular, after the Corona 19 incident, the government and political circles have been mobilizing banknotes one after another to support the common people. Typical examples are secondary preservation loans, postponement of principal and interest, and the payment of disaster support. However, Citibank had a lower participation rate in such policy activities than domestic banks. It was also said that they were directly accused by the financial authorities for this.
The subsequent pressure on the banking sector, such as the profit sharing system and the reduction of dividends, is also a burdensome factor. Citibank Korea has sent most of its net profit every year to its US headquarters in the form of dividends. Although it is not listed as a domestic financial holding company, we have no choice but to pay attention to dividends this year. An official from a domestic bank said, “It is the same as domestic banks that have advanced overseas bring most of their net profits to Korea.” I would say.
Of course, it is highly likely that global financial companies will decide whether to continue their business based on profitability. However, the domestic banking industry is fighting not only an opaque future but also an invisible enemy of’government’. It has been a long time since only domestic banking stocks have been neglected even during the golden age of the stock market, as they cannot pay dividends or business at will.
If Citibank Korea withdraws, will it remain only about banks in’other countries’? Not like that. Korea may become a’country where global financial companies have also lost their hands’. Can I dream of becoming a’financial hub’ in this environment? I don’t think we should be blinded to the banknotes saying, “I can understand even if I withdraw from Korea these days.”
Reporter Jeong So-ram [email protected]
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