Citibank Korea to phase out retail business after giving up sale efforts

Citibank Korea Inc. is shutting down its retail franchise permanently after repeated failures to find a buyer.

The South Korean unit of Citigroup Inc. made the decision public on its website, saying it had carefully explored all potential exit strategy options, following Citigroup's April 15 announcement of its exit from retail banking in 13 markets including South Korea.

The sale of retail financial products and services to new customers will end soon, while the bank will continue to serve existing accounts indefinitely.

Citibank Korea will maintain access to mobile banking, online banking and ATM transactions until further notice, according to a customer notice published on its website.

Citing industry sources, The Chosun Ilbo earlier reported that the unit's board voted for the phased liquidation of retail operations Oct. 22.

Outright liquidation was one of Citibank Korea's exit scenarios, which included the full or partial sale of its retail operations comprising the businesses of wealth management and credit cards, as well as deposit-taking and lending services.

Some potential buyers backed out at the last minute due to the high cost of assuming payroll, according to the publication.

Meanwhile, the bank's management has made a buyout offer to its 2,500 employees in retail operations who chose to leave the bank voluntarily. A number of retail banking employees were also offered to be reassigned to corporate banking, which will remain in operation.