updated 11:58 PM CET, Nov 29, 2022

Citigroup announces plan to 'wind down' its UK retail banking business to focus on 'select wealth clients'

Citigroup, the New York-based, NYSE-listed, multinational banking company that many U.S. expats still have accounts with, has announced that it is planning to close its UK retail banking operations, in its latest move away from retail banking, and towards increasing its focus on its wealthiest customers.

In a statement, the bank said that "should this [plan] be implemented, the overwhelming majority of clients would not be affected until 2023."

Citi's 270-word announcement about its "proposal" to focus exclusively in the UK on "personal banking and wealth management [for] select wealth clients" was lacking in such details as how many account-holders were likely to be affected, and of these, how many were Americans who were living in the UK. 

However, when asked whether the proposal might see those Citibank clients living in the UK who have accounts with branches located in the U.S. having these closed, a spokesperson said: "This proposal is specifically related to Citi’s UK retail banking business. If the proposal is implemented, their [U.S. clients with Stateside Citi accounts]  U.S. account would remain unaffected."

Although the bank doesn't say how many American expat account-holders it has in Britain, it is thought there could be a fair number, as Citi is a major banking institution in such U.S. "international hot spots" as New York City and the greater New York area, where many U.S. expats lived before moving abroad.

As this and other publications have been reporting for some time, the number of banks outside of the U.S. that are willing to accept American expats as clients has been shrinking steadily since the introduction, in 2010, of a U.S. tax evasion-prevention law known as the Foreign Account Tax Compliance Act (FATCA). 

As reported, a survey carried out by the Association of Americans Resident Overseas in October and November of 2020 found that 40% of the more than 400 expats surveyed said they had had a U.S. bank refuse their business while living outside of the U.S., with one respondent saying their U.S. bank closed their account because they were overseas, even though they had been with the bank for 25 years.

In an effort to address this issue, the Washington, DC-based American Citizens Abroad announced a partnership with the U.S. State Department Federal Credit Union (SDFCU) in 2016, to provide U.S. expats with U.S.-citizen-friendly banking services. Such SDFCU accounts continue to be available to U.S. expats, as ACA explains on its website, here. 

The Citi proposal explained

In its statement, Citi said its proposal to wind down its UK retail banking operations would enable it "to focus on clients requiring comprehensive advice on managing their wealth and [who] would benefit from Citi's key strengths in private banking and investment services."

It added: "Clients of Citi's UK retail bank who meet this profile would be invited to make use of Citi's private banking services, where they would enjoy the benefits of a broader product range and more bespoke service, including transaction banking.

"Citi's UK retail banking business would wind down operations if this proposal is implemented. Citi would support those clients not transitioning to its Private Bank as they transition to a provider of their choice."

Citi said it is currently consulting with employees of its UK retail banking business, and that no final decision would be made "until that process concludes."

If the proposal goes ahead, Citi said the "overwhelming majority" of its clients "would not be affected until 2023, and Citi would ensure all account closures are made in line with the relevant 'Terms & Conditions' and regulatory requirements."

Global shift in direction
of 'wealth management'

Citi's move out of retail banking in the UK and in the direction of helping wealthier clients to look after their private banking and investment needs reflects a recent and hard-to-miss global trend on the part of banking groups in the U.S. and elsewhere. 

In 2020, for example, Citi unveiled what it said would be its "largest wealth hub globally" in Singapore, alongside announcing its plans to significantly expand its wealth operations there. Citi Wealth Hub at 268 Orchard Singapore cropped

The new  Singapore wealth hub, pictured right (and explained in detail on its own website), is located across the street from the five-star Mandarin Orchard Hotel on Orchard Road, in a well-known, upscale Singaporean shopping district.

As reported, Citi said at the time that the new wealth hub would look to cater to Southeast Asia's rapidly-growing affluent and high-net-worth market, via its "Citigold" and "Citigold Private Client" operations.

Meanwhile, a few months after unveiling this wealth hub, Citi announced plans to put its consumer banking operations in 13 markets across Asia and Eastern Europe up for sale, as part of what Citi chief executive Jane Fraser referred to at the time as the bank's "ongoing refresh of our strategy" that would see it "double down on wealth" from just four "wealth centers" – in Singapore, Hong Kong, the UAE and London. 

The difficulty banks are facing is that as retail banking has moved online, retail banking services have become highly competitive in terms of pricing, while wealth management and investment services remain profitable. Maintaining bank branches has become so expensive that some banks in the UK have begun to join forces to operate out of "banking hubs," where account-holders can withdraw and deposit cash, make bill payments and otherwise carry out the sorts of banking transactions they used to when their bank still had its own branches.  

Editor's note: This article has been updated to include the information that American expats living in the UK who have Citi accounts with branches back in the States would not lose these accounts, if the proposed winding-down of Citi's UK retail banking operation does take place.