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CAPITAL MARKETS

Russia sale is a fly in the ointment among Citi’s consumer exits

Jane Fraser can front Citi’s investor day with good news about consumer divestments in Asia. It is hard to see a Russia sale now, though.

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Jane Fraser presents Citi’s annual investor day on Wednesday, which includes both a review of developments under her watch to date and a plan for what comes next.

For some time, she has hoped to be able to tell investors that her bold plan to exit consumer operations in 13 markets, mostly in Asia Pacific, is largely complete, and that the proceeds and the freed-up capital can soon be deployed in institutional and wealth businesses where she believes better returns can be found.

In the main, she can. We can argue about the merits of the plan itself, but under the parameters that she set, the divestment has gone about as well as she could have hoped.

Citi has successfully sold business in Australia, Taiwan, Malaysia, Indonesia, Thailand, Vietnam and the Philippines. It has done so in a way that has preserved the jobs of the departing employees, selling to buyers who make sense not just financially but in terms of their own strategic ambitions, and in clean deals that sell the whole business rather than leaving any loose ends.

The deals have brought decent premia in many cases, and have put the bank on track to reach its unofficial target of freeing $7 billion of allocated tangible common equity.


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