Citigroup to restructure consumer finance unit

3 June 2010

CitiFinancial, the consumer division of investment bank Citigroup, is to be restructured.

According to the financial institution, the unit will be split into two new offshoots called CitiFinancial Servicing and CitiFinancial Service Branches.

The investment bank stated that it will retain its presence in all of the 48 US states it currently serves.

However, reports have claimed the overhaul of the division will lead to more than 300 branches being shut down and more than 500 job losses.

The financial institution believes the changes will enable it to continue lending to its current client base while also allowing it to prepare to help future customers.

Vikram Pandit, chief executive officer at Citi, said: "CitiFinancial is an important business and a great franchise with a long history of keeping credit flowing in America. We believe this segmentation will allow the community-based lender to better serve its customers across the United States."

Mary McDowell, chief executive officer of CitiFinancial, added that the move was undertaken to help customers in the “challenging economic environment”.

CitiFinancial will also be renamed once the division has been completed.

By Jim Ottewill

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