Date
18 November 2018
Citigroup expects to improve branded-card income as promotions that offered customers little or no interest for a fixed time come to an end. Photo: Bloomberg
Citigroup expects to improve branded-card income as promotions that offered customers little or no interest for a fixed time come to an end. Photo: Bloomberg

Citigroup shakes up consumer bank, card chief leaves

Citigroup Inc. restructured its consumer bank, elevating one executive and triggering the departure of another, as the third-biggest US bank moved to improve results, Reuters reports.

The changes will “harmonize” Citigroup’s consumer business with operating models of units in Asia and Mexico that have produced better results, Stephen Bird, chief executive of Citigroup’s global consumer banking business, said in a memo seen by Reuters.

With the new structure, Jud Linville, who had been head of global cards and consumer services and a member of Citigroup’s operating committee, will leave and David Chubak will become head of retail banking and consumer lending globally, overseeing products, strategies and investments.

Some of those responsibilities in cards had previously been handled by Linville.

Anand Selva, the current head of consumer banking in Asia, will become the regional head for North America. Selva has been with Citigroup for 26 years, during which time he has overseen consumer business in 17 countries and advanced digital offerings, Bird said.

The moves come as Citigroup is trying to improve the performance of its card business and reconnect with US consumers, despite having few branches, through a new mobile app and partnerships with ATM providers.

Citi-branded cards in the United States are an area of particular concern to Wall Street.

Executives had targeted 3 percent annualized revenue growth from branded cards when the company set profit goals for 2020 at an Investor Day conference in July 2017. But early this year chief financial officer John Gerspach reduced that goal to 2 percent.

“US Cards has consistently missed our expectations, so we believe change could be a positive longer term,” KBW analysts said in a report.

Citigroup expects to get a bump in branded-card income as promotions that offered customers little or no interest for a fixed time come to an end. Nearly half of those accounts have been converting to paying full rates, Gerspach has said.

Linville, 60, had been at Citigroup for eight years, and received credit for streamlining the company’s roster of card offerings. But stiff competition for premium card customers from rivals like JPMorgan Chase & Co. have weighed on results.

Meanwhile, Credit Suisse Group AG is splitting its international wealth management unit into seven regions from four, in an ongoing push by CEO Tidjane Thiam to regionalize the bank, Bloomberg reported, citing people briefed on the matter.

The seven regions are Latin America, Brazil, Western Europe, Southern Europe, the Middle East, Africa, and Central and Eastern Europe.

The wealth management unit led by Iqbal Khan will give the regions more autonomy to make decisions, and each will have its own management, Bloomberg said.

An announcement about the split, dubbed “Project Momentum”, could come as early as this week, the report added.

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CG

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