COSTA RICA NEWS — Citibank has joined the growing list of multinationals abandoning Costa Rica, with the announcement on Tuesday by Citigroup that it will bow out of the retail banking business in 11 markets.
In Latin America: Costa Rica is on the list with El Salvador, Guatemala, Nicaragua, Panama and Peru. Citi will also exit consumer banking in Egypt, Japan, the Czech Republic, Hungary and Guam.
The bank said sales of the businesses were underway in the majority of the markets affected. Citi expects the sales to be substantially complete by the end of 2015.
However, the Coalición Costarricense de Iniciativas de Desarrollo (CINDE) – Costa Rican Coalition for Development Initiatives – confirmed that the Shared Services Centre that Citi operates in the country will not be affected.
Citigroup CEO Michael Corbat said in a statement the bank is exiting those areas to focus on market share and growth potential in places where it believes it can be competitive, but will maintain institutional banking operations in these areas.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders,” Corbat said.
Citi strengthened its Costa Rica operations in late 2006, following the purchase of Aval-Uno and Cuscatlan banks. Before the acquisition, Citi only had an office serving corporate banking.
The Cuscatlan purchase gave Citi a portfolio of mortgage and consumer loans, while the Banco Uno purchase gave it a strong local presence as a card issuer. However, the merger of the three banks was not easy and took several years to successfully integrate their electronic systems, which led to a deterioration of customer service.
Last month Citi reported 711 employees.
In May Citigroup expanded its Shared Services Centre with an investment of US$35 million dollars and the generation of 500 new jobs in Costa Rica over the next two years.The campus is part of the El Cafetal Corporate Centre. The Shared Services Centre serves the multinational’s tech, finance and accounting operations from 23 countries in America and Asia.
The announcement of the departure of Citi came a day after the Prival Group announced a bid to acquire Banco Bansol, one of the newest financial entities in the domestic market.
Sources: El Financiero; Associated Press; Central American Data
