Citigroup Inc. (NYSE:C) is planning to close nearly 10% of its branches in India, to expand digital banking, as per a Bloomberg report. This move is in response to customers largely switching to the bank’s digital banking platform to carry out their transactions, the source quoted people familiar with the matter.
The bank may shut down around 5 out of 44 branches nationwide, to focus on larger cities as well as wealthier clients. Further, the affected employees will be redeployed by Citigroup.
Citigroup’s consumer banking business manager in India – Kartik Kaushik – stated that nearly 97.5% of the bank’s transactions in India are currently conducted through digital platforms, compared to 75% three years ago. He further added that the bank will be largely focusing on locations with potentially high growth rate. Kaushik, however, declined to comment on the branch closures.
During second-quarter 2016, the bank reported a 13% year-over-year decline in consumer banking branches in Asia, bringing down the count to 461. Notably, Citigroup is one of the largest foreign banks operating in India.
Citigroup is focusing on digital banking to curtail costs and expand its customer base, besides improving profitability.
In Feb 2016, the bank announced its plan to sell its Consumer Banking operations in Brazil, Argentina and Colombia. Also, in Apr 2016, the bank downsized its presence in China to grow via its digital platform.
Additionally, the move is in line with other global players like HSBC Holdings plc (NYSE:C) . In May 2016, HSBC declared its plan to shut down nearly half of its branches in India, to focus on digital banking, aiming to expand its consumer business in the South Asian nation. (Read more: HSBC to Close 24 Indian Branches to Expand Digital Banking)
Big banks, including Bank of America (NYSE:BAC) Corporation (NYSE:C) , JPMorgan Chase & Co. (NYSE:JPM) and Barclays (LON:BARC) PLC, are also taking similar defensive measures.
Citigroup currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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