Wednesday, December 17, 2014

Citigroup closing 13 of its 21 Phila. region branches

Citigroup, which entered the Philadelphia market with a bang six years ago, said it will be closing 13 of its 21 branches here, with 90 positions being lost. The closings include virtually all of its suburban locations, which is part of a global strategy to focus on an urban physical footprint, spokeswoman Catherine Pulley said during an interview Friday.
The New York-based company operates its retail banking under the Citibank name. It said earlier this month that it plans to close about 44 bank branches nationwide to cut costs. It also plans on scaling back operations or shutting branches overseas.
The local closings include Villanova, Berwyn, Willow Grove, Abington, Doylestown, Springfield (Delaware County), Montgomeryville, Media, East Norriton, Warrington, Southampton and Plymouth Meeting. The bank also will be closing its Chestnut Hill location — the only branch shuttering in the city limits. Pulley said those locations will close by March 15 with deposits transferred to its 1760 Market St. branch. Citi closed its Oxford Valley location earlier this month.
Citigroup will continue to operate seven locations within Philadelphia as well as its Bala Cynwyd and Cherry Hill, N.J., sites.
Pulley said the closures do not mean Citibank is pulling out of the region. She said the bank opened a branch in Germantown Monday, which is attached to its mortgage lending facility that opened there earlier this year.
Pulley said Citibank has roughly 800 employees in the Philadelphia region and about 90 positions will be affected by the branch closings. She said some employees will be offered positions within the company while the rest will be offered a severance package.
Citigroup, which currently employs about 260,000 people around the world, said it expects to take a $1 billion pretax charge in the fourth quarter and a $100 million charge in the first quarter of 2013 as a result of the cutbacks.
In all, the cuts are expected to save the company $1.1 billion annually beginning in 2014. Citigroup said it would save about $900 million next year.
The plan calls for the elimination of 1,900 positions from Citi’s Institutional Clients Group; the elimination of 6,200 from its global consumer banking group; 350 from Citi Holdings; about 2,300 positions from operations and technology, and 300 from “global functions.”
Citibank began opening Philadelphia-area branches in 2006 as part of a plan to broaden its New York-dominated geographic footprint. The plan was to cross-sell retail banking services to its existing credit-card, mortgage, automobile-finance and student-loan customers in the area. The bank wound up opening 22 local retail branches organically within two years. But before opening the Germantown site Monday, it had not opened any since November 2008 as parent Citigroup (NYSE:C) was hit hard by the recession.
Reports surfaced as early as 2009 that Citigroup was not pleased with its retail network in Philadelphia and was looking for a way out. But the bank denied that publicly and kept its locations intact. Citibank has $1.75 billion in deposits in those local branches — or roughly $80 million per branch, which is a solid number — good enough for 12th most locally.
But many feel the bank’s change in leadership in October, when CEO Vikram Pandit was replaced by Michael Corbat, might have led to a change in thinking.
In addition to its retail operations, Citi also has private, commercial and mortgage banking operations in Philadelphia.
Jeff Blumenthal covers banking, insurance and law.

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