Citigroup said it is splitting into two operating units, one of which will focus on core banking, while the other will focus on brokerage and retail asset management, local consumer finance, and a pool of assets that require special management (and also which can be put up for sale later).

Citigroup on Friday reported an $8.29 billion (5.6 billion pounds) fourth-quarter loss, its fifth straight quarterly loss. For the full year, Citigroup reported a net loss of $18.72 billion.

Meanwhile, Citi had agreed on Wednseday to split off Smith Barney, its retail brokerage arm, into a joint venture with Morgan Stanley to raise capital to offset the fourth quarter’s huge losses.


What restructuring means is the the core commercial, retail and investment banking businesses will be called Citicorp.The businesses involved in other types of lending or finance will be in Citi Holdings. 

In a way, Citigroup has gone against the trend of both being under one umbrella.

The trend has been that banks have traditionally acquired other non-banking businesses like credit card and consumer finance businesses and have merged as one entity. But Citi now thinks that strategy has to be reversed, and so it decided to split deposit and consumer finance businesses.

What Makes Citi Holdings 

- CitiFinancial, a consumer finance company with over 3,000 branches in the US, offering products like personal loans and auto loans. In India, CitiFinancial has about 2,000 employees, and is a large operation.

-CitiMortgage deals with mortgages originated by brokers rather than Citi branches.

-Primerica; this unit sells annuities and retirement funds, and also makes consumer loans. This will also be part of the new unit now. 

-Private label credit cards: This business issues cards bearing a retailer's name, rather than Citi's. Apparently, JPMorgan Chase & Co. might be interested in buying this business.

According to Wall Street Journal, these businesses combined will hold about $850 billion in assets, and generate about 20% of Citi's earnings.

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