Citi will incur between $1.2 billion and $1.5 billion in charges to wind down its consumer banking operations in South Korea, the bank said Monday in an amendment to an earlier Securities and Exchange Commission (SEC) filing.
The bank said it would recognize the charges — mostly related to employee buyouts — throughout 2021 and 2022.
Citi said in April it would exit retail banking in 13 Eastern Hemisphere markets, opting instead to focus on four markets with high returns: London, Singapore, Hong Kong and the United Arab Emirates.
The bank found a buyer for its Australia operations in August, and told Bloomberg last month it has seen "strong interest from a broad range of bidders" on 11 others — South Korea being the exception.
Shuttering South Korea retail operations would allow Citi to redistribute the $2 billion it holds in equity to keep that business line afloat. Pouring that money into more profitable silos will eventually boost dividend payouts to investors. The bank is planning a presentation in March so investors can see the extent of the bank’s profitability under its amended business footprint, according to The Wall Street Journal.
Citi filed paperwork with the SEC two weeks ago indicating it would "incur significant wind down and related charges" to extricate itself from the South Korea retail market, but that notice did not include a cost estimate. It did, however, indicate the charges were expected to gnaw away at profits through the end of 2023.