Exiting Unprofitable Markets
Efficient allocation of resources will be the first of three priorities for Citigroup. The bank will continue to invest in high-growth emerging markets such as Mexico, China, Hong Kong, Singapore and India, which contribute about 30% of its revenues. It will also continue to optimize its businesses in developed markets such as the U.S. and U.K, which account for more than half of its revenues, but which have seen a ballooning of expenses in the wake of the financial crisis. "This is a concentrated opportunity where we can make real progress in efficiency and return," said Corbat. The company will exit or scale back significantly its presence in 21 markets that have produced a return on assets of as low as 0.40%, which Corbat called "unsustainable." The CEO did not elaborate on which markets Citigroup would exit. Last year, the bank said it would exit unprofitable markets such as Paraguay, Uruguay, Romania, Turkey and Pakistan. Citi continues to have institutional client businesses in these countries but does not see a future in consumer businesses. In its securities and banking business, Citi will continue to remain vigilant on headcount and compensation. "If we don't execute on our plan we will not be afraid to take further action on restructuring that business," Corbat added.