Citigroup Arm Enters Deal to Exit Consumer Banking Business in Poland

Citigroup Inc.’s C, through its subsidiary Citibank Europe Plc, announced that Citi Handlowy has announced an agreement to sell its consumer banking business in Poland to VeloBank S.A (Velobank). This transaction aligns with Citigroup’s broader strategy to exit consumer banking and strengthen its focus on core operations.

Details of the C’s Deal

The agreement involves the demerger of Citi Handlowy’s consumer banking operations, including wealth management, micro business banking, credit cards, consumer loans, deposits, and assets under management, consumer clients of the brokerage business, branches, and other consumer-related assets to VeloBank. Notably, employees and branches of consumer business will also transition to VeloBank S.A. upon completion of the transaction.

However, the transaction excludes Citi Handlowy’s institutional banking operations, which the company will continue to invest in and expand to serve clients in Poland locally, regionally, and globally. The transaction, subject to regulatory approvals and antitrust clearance, is expected to close by mid-2026. While financially immaterial to Citigroup, it is anticipated to provide a modest regulatory capital benefit.

The transaction, subject to regulatory approvals and antitrust clearance, is expected to close by mid-2026. While financially immaterial to Citigroup, it is anticipated to provide a modest regulatory capital benefit.

Citigroup’s head of International, Ernesto Torres Cantú, commented on the transaction, stating, "Citi Handlowy has been providing financial solutions to corporations in Poland through a history spanning 155 years, and we remain fully committed to Poland’s economic growth and to our institutional clients in the country. This transaction enables us to deploy additional resources to our institutionally focused businesses, so we can continue to connect corporations in Poland to our global network."

Cantú further added, “We’re proud of this significant milestone in simplifying our firm, and we’re pleased that our consumer banking colleagues in Poland are going to a buyer that will continue to invest in this great franchise. We wish them well in their careers with VeloBank and thank them for their dedication in serving their clients with excellence during this process.” He also emphasized Citigroup’s commitment to simplifying its operations while ensuring continuity for consumer banking clients.

Citigroup’s Prior Efforts in the Consumer Banking Business

Citigroup has been winding down its consumer banking operations globally to focus on higher-return segments. In line with this, in April 2021, Citigroup announced its plan to exit consumer banking operations in 14 markets across Asia and EMEA.

In sync with this, in December 2024, Citigroup completed the separation of its institutional banking operations in Mexico from its consumer, small business, and middle-market segments, marking a significant milestone in its restructuring efforts. Earlier, in June 2024, Citigroup sold its China-based onshore consumer wealth portfolio to HSBC China, a wholly owned subsidiary of HSBC Holdings plc. 

As part of its broader strategy, Citigroup has continued to wind down its Korea consumer banking operations and its overall presence in Russia while preparing for a planned initial public offering of its consumer banking and small business and middle-market banking operations in Mexico.

These moves by Citigroup aim to free up capital for investment in higher-return segments like wealth management and investment banking. Through these efforts, Citigroup expects revenues to achieve a compounded annual growth rate of 4-5% by 2026-end, while driving $2-2.5 billion in annualized run-rate savings by 2026. Management also projects a return on tangible common equity of 10-11% by 2026, reinforcing the company’s commitment to long-term profitability and efficiency.

Our Viewpoint on Citigroup

Through strategic exit from non-core businesses, C will enhance its focus and boost its operational efficiency within its key business segments. This strategic focus will likely lead to improved profitability in the future, as Citigroup focuses its resources on high-growth areas.

Over the past year, shares of Citigroup have gained 21.4% compared with 29.6% growth recorded by the industry.

Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Steps Taken by Other Banks

In March 2025, HSBC Holdings Plc’s HSBC U.K. division, HSBC UK Bank plc, announced the sale of its private client trust business – HSBC Trust Company (UK) Limited – to Ludlow Trust. The financial terms of the transaction have not been disclosed.

This move aligns with the HSBC business simplification plan announced in October 2024. Further, in sync with its effort, the company announced the winding down of its investment banking activities in the U.K., Europe and the United States, and divestitures of its French life insurance arm, HSBC Assurances Vie (France) and private banking business in Germany. It also announced the sale of its business in South Africa.

Likewise, in February 2025, Barclays PLC BCS completed the sale of its German consumer finance business, Consumer Bank Europe, to BAWAG P.S.K., a subsidiary of Austria-based BAWAG Group AG. This move aligns with the company’s plan to streamline its operations as outlined in the Investor Update in February 2024.

This sale is part of BCS’s broader strategy to exit retail banking in Europe, responding to shifts in consumer behavior post-pandemic. In addition to the German sale, Barclays has announced plans to enhance digital banking services in the U.K. and expand its corporate and investment banking presence globally, including new ventures in Asia.

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