Home / Is Citibank scaling down?

Is Citibank scaling down?

Weeks after Citibank announced its exit from Oman, rumours are flying that the American bank is close to reducing its stake in Saudi Arabia’s Samba, known up until last month as Saudi American Bank.

Weeks after Citibank announced its exit from Oman, rumours are flying that the American bank is close to reducing its stake in Saudi Arabia’s Samba, known up until last month as Saudi American Bank.

Speculation has mounted as a result of a management reshuffle at the bank, the name change and comments made by Saudi investor Prince Alwaleed bin Talal, a shareholder in Citigroup and Samba.

“Citigroup still has a 20% stake in the bank and I expect that it will be reduced to 10% within months, so there is no point keeping the name. It has nothing to do with a boycott [on American brands]. What happened was that the American partner Citigroup relinquished its administrative role in the bank,” Alwaleed told Arab News, the Saudi Arabia-based daily.

However, bank officials have denied any disinvestment in Samba and sought to clarify the recent management changes there. A source close to the bank said that Citigroup was managing Samba on a contract that led it to assume top management roles in the organisation; it has now decided not to renew the contract and has handed over control to a Saudi management team.

The bank says it also has no immediate plans to reduce its stake in Samba. According to adverts in local media that announced the name change, Samba merely reflects the name by which the organisation is known to its clients.

“There is absolutely no plan to exit the region, Citigroup has been present in the region for more than 50 years and remains fully committed to the region. We continue to view the Middle East as a critical part of the bank’s global franchise,” Citigroup told Arabian Business in a statement.

The bank definitely has decided, however, to close down its Oman operations after an internal review of its operations in the Sultanate. It did not mange to build up a substantial market share in Oman, a country where local banks retain a strong presence.
A statement from Citigroup said that Oman would now be a non-presence country served out of Citibank Bahrain and Citibank UAE. Its private banking clients in Oman are now serviced out of the Citigroup Private Bank’s regional office in Dubai.

“A review of our business in Oman concluded that there are insufficient opportunities to grow our business model in Oman to capture significant market share. Citibank remains committed to the Non-Resident Indian (NRI) business in Oman which will be serviced out of Dubai,” the statement said.

The withdrawal from Oman did not surprise regional analysts. “Oman is over-banked,” said Henry Azzam, CEO of investment and research firm, Jordinvest. “ It’s not profitable and you know what the Americans are like. American businesses are run on a quarterly basis; if, after one quarter, they don’t make money, they will cease operations.”

BankMuscat, Oman’s largest bank has acquired Citibank’s personal loan portfolio in Muscat and is now Citibank’s preferred business partner for all future business in Oman.
Last year, the bank also bought out ABN Amro’s operations in Bahrain.

With the opening up of Kuwait’s financial sector, Citi is reviewing new franchise opportunities, but declined to comment further on future plans. Citigroup has more than 300,000 retail customers across the Middle East, while its treasury client base exceeds 450 customers. It is present in eight countries in the region in both corporate and retail banking services and employs more than 2,300 staff.

Follow us to get the most comprehensive technology news in UAE delivered fresh from our social media accounts on Facebook, Twitter, Youtube, and listen to our Weekly Podcast. Click here to sign up for our weekly newsletter on curated technology news in the Middle East and Worldwide.

REGISTER NOW | Webinar Event | Security you can bank on – Safeguarding the Middle East’s financial sector

Presented in partnership with security and network specialist Cybereason, the second in the three part webinar series will bring together a panel of experts to discuss how banks and financial institutions are evolving their service offering while simultaneously staying one step ahead of the cyber criminals who seek to bring their operations crashing to the ground.