Citi (NYSE:C) today signed an agreement with Erste Bank Hungary Zrt. and its subsidiary Erste Befektetési Zrt. (Erste Investment) to sell its consumer banking business in Hungary.
The sale includes Citi’s retail banking, consumer loans, cards businesses and the transfer of consumer banking employees. This transaction is subject to regulatory approvals, which are expected by the end of 2015. Transfer of customer accounts is expected to be completed in Q4 2016. The financial terms of the transaction are not material to Citi.
Citi will remain in Hungary and intends to focus on expanding the services it offers to Hungarian corporations, financial institutions and public sector clients. Citi will continue to service its multi-national clients with operations in Hungary. Citi also remains committed to operating and expanding its Citi Service Center located in Budapest, currently serving over 50 countries worldwide.
“Since 1985 we have proven our commitment to the country and will continue to grow and invest in our Institutional and Commercial Banking businesses to better serve our local and global clients. We believe this transaction is a positive outcome for our Hungarian consumer banking customers and employees. We recognize their contribution to the rich heritage of Citi Hungary and thank them for their longstanding support and partnership” said Jon Wiggins, acting CEO for Citi Hungary. "This decision is in line with Citi’s global strategy of focusing our resources on those sectors where we have a competitive advantage, including our institutional and commercial banking businesses in Hungary.”
The sale represents yet another step in Citi’s strategy of winding down Citi Holdings by divesting non-core operating businesses and assets in an economically rational manner. The sale also is a part of Citi’s previously announced strategy to accelerate the transformation of the Global Consumer Bank by refining its footprint and streamlining operations to 24 markets where it has the greatest scale and growth potential.
Terms of the transaction were not disclosed. Citi's Institutional Clients Group advised Citi on this transaction.