Boston, MA 08/22/2214 (wallstreetpr) –In a very bizarre revealing, it was found that the earnings of Citigroup Inc (NYSE:C) bank operating in Japan was even less than the salary of company’s Global CEO in the previous year. This makes it quite evident as to why Citigroup has planned selling this consumer business.
Citibank Japan’s Income
The net income of Citibank Japan Ltd totalled at 1.34 billion yen or $12.9 million in the financial year ending in March 2014. This called for direct comparison with the overall annual compensation of Global CEO Michael Corbat, whose salary totalled at $14.5 million. In fact, in context with the same, the U.S. bank has approached a few Japanese companies, which also include regional lenders, trust banks as well as three biggest lenders.
Citigroup Inc (NYSE:C), in the meanwhile, can expect some solace from Japan after it retracts from the sphere of retail banking in markets that give low returns and these include Turkey, Greece and Spain as well.
What analysts think?
CreditSights Inc analyst in Singapore, David Marshall opined that until and unless a business in the higher-margin consumer lending or has the highly large-scale operations like those of megabanks, it becomes quite difficult to mint money from lending in Japan. He added that Japan offers an environment where the rate of interests is very low and also the investors find it difficult to generate money.
SMBC Nikko Securities Inc analyst in Tokyo, Nozomi Kokubun, in the meanwhile opined that there are numerous banks in Japan and this is what leads to staunch competition and declining interest rates.
Citigroup Japan Status
Thirty-three branches of Citigroup Inc (NYSE:C) Japan are a representative of below 1% of the total global net income summing up at 1.1 billion during past 3 years. The loans of Citigroup Japan, on the other hand, amounted to 356.1 billion yen, which means 10% of the overall deposits at March end.
The investment banking business of Citigroup Inc (NYSE:C) in Japan faced a net loss of 3.5 billion yen in year which ended in March 2014. This came in direct contrast with the 1 billion yen profit in 2013.
