A major change is set to occur in Australian banking, with Citi announcing it will be pulling out of all consumer banking products.
After 36 years in Australia, the global bank Citigroup announced yesterday it would be selling its consumer banking operation and exiting the country, with the intention of focusing purely on investment banking here.
The bank will no longer offer credit cards, home loans, savings accounts and term deposits to Australian customers..
The move comes after Citi global chief executive Jane Fraser launched a review of Citi's retail banking operations in Australia earlier this year.
Banks leaving the consumer market is rare in Australia, but Citi's departure comes less than six months since neobank Xinja announced it was it was handing back its banking license after failing to become sustainable.
Citi Australia CEO Marc Luet said Citi had commenced the sale process of its Australian consumer business, and had received interest from several potential buyers.
"During the sale process, there will be no change in the way Citi serves its consumer banking customers. Consumer operations will continue to operate as they do today," Mr Luet said.
"We are committed to the Australian market and the move will allow us to focus our resources on businesses that can drive stronger growth, deliver scale and enhance returns over the long run.”
What happens to Citi customers now?
The exact date of Citi's Australian exit is not yet clear, as this will largely depend on when the company is sold and to whom.
For savings account, home loan and credit card customers, their products should simply move from bank to bank when Citi is bought.
So Citi customers will simply have their products switched to the new bank, whoever that might be, or they can opt to switch banks themselves and refinance their mortgage ahead of time.
Citi credit cards
Citi is a big player in the credit card space, sitting at number five in customers and is only behind the big four banks.
With 13% of the credit card market in total, Citi is highly competitive, but customers looking to switch now can compare some of the most competitive credit card products on the market.
Citi home loans
Citi is less of a major player for mortgages, as the latest monthly APRA data shows it's the 21st biggest bank for home loan lending with a bit over $4.1 billion and $2.44 billion in owner-occupied and investment lending respectively.
The table below shows some of Citi's current lowest rate home loans - both fixed and variable. Customers can compare these loans to some of the most competitive interest rates around for investors and owner occupiers.
Citi savings accounts & term deposits
Citi also has the 17th highest amount of deposits in Australia, with more than $12 billion worth of residential deposits.
Citi's highest savings account rate is a total rate of 1.10% p.a offered on its Online Saver introductory account for four months, before reverting to the base rate of 0.35% p.a.
For term deposits, it offers a mere 0.75% p.a, well below some of the highest term deposit rates on offer.
Photo source: Flickr
