Citibank to Exit Australian Retail Banking

[SIA1A]

Citibank made the following announcement regarding its Australian retail banking operations on 15 April 2021:

Australia

In 2026, Citi Australia celebrates 100 years of operations in Australia. With our extensive experience, we strive to be Australia’s preeminent banking partner for corporate, investor and public sector clients with cross-border needs. Today, Citi Australia delivers an innovative range of global...

www.citi.com

Citi stated that it will be business as usual for it's Australian retail banking operations during the sale of this business. Unsurprisingly, Citi provides no indication about what Citi retail customers should expect after the sale of its business is executed.

I note that about a month ago Citi reduced the points it offers for many of its credit card transactions - part of preparing the retail bank for a strong sale price - at the cost of current retail customers?

 

[jakeseven7]

Don’t care about my FFL credit card - has been watered down so much barely worth it.

But the Citibank Plus debit card is one of the best OS cards based in Australia to use when overseas, best rates, amongst lowest fees.

A lot of AFF members will be upset if that is going as well....

I wonder what will happen....

 

[Must...Fly!]

Citibank Plus was my primary bank account for many years. I recently transitioned across to Macquarie, though still use the Citi account extensively. It was a wonderful product for years. I think the shine has worn off a bit lately, because there are a number of banks out there offering similar benefits - fee free accounts, and zero international transaction fees. Never the less I will be sad to see it go, I always (somehow...) received excellent service from Citi when calling them.

 

[jakeseven7]

Citibank Plus was my primary bank account for many years. I recently transitioned across to Macquarie, though still use the Citi account extensively. It was a wonderful product for years. I think the shine has worn off a bit lately, because there are a number of banks out there offering similar benefits - fee free accounts, and zero international transaction fees. Never the less I will be sad to see it go, I always (somehow...) received excellent service from Citi when calling them.

I did too, I'm a bit mystified by all the complaints about their poor service, I've always had exceptional service, even when I was just a baseline member, now as Citigold of course its even better.

Out of interest because I suspect I will have to do the same when Citi disappear, what banking product at Maccas Bank is equivalent to the Citi Plus?

 

[Must...Fly!]

Out of interest because I suspect I will have to do the same when Citi disappear, what banking product at Maccas Bank is equivalent to the Citi Plus?

Just their plain old transaction account.

Transaction account

An everyday digital bank account that works around the world, with great variable rates and no Macquarie fees.

www.macquarie.com.au

They recently reissued debit cards and have removed EFTPOS though which is a pretty big negative IMO

 

[jakeseven7]

Just their plain old transaction account.

Transaction account

An everyday digital bank account that works around the world, with great variable rates and no Macquarie fees.

www.macquarie.com.au

They recently reissued debit cards and have removed EFTPOS though which is a pretty big negative IMO

Thank you! And the FOREX rates were as good as Citi Plus in your experience?

 

[_flyer]

I assume another bank will buy the accounts and we will continue as normal with a similar offering, just a different logo. Just my opinion.

 

[serfty]

... and we will continue as normal with a similar offering, just a different logo. Just my opinion.

I suspect the main benefits as already mentioned will be eventually enhanced©.

 

[SIA1A]

My guess:

Citi retail is the 5th largest credit card issuer in AUS, behind the Big 4, HSBC is a distant 5th.

Maybe the card business will be parceled separately to other parts of the bank, eg it's mortgage business.

It's hard to see any of the Big 4 grabbing Citi retail, they've already demonstrated that they can obtain/retain market share in Aus organically.

Perhaps HSBC wants to increase its presence in Aus. ING might also be interested, though it runs a very different, low risk, style of business.

Other existing banks in AU are possibly too small to bid.

That leaves other foreign players, perhaps someone with only a minor or nil current exposure in Australia?

On the personal front, I hope whoever the buyer is decides to offer Google Pay - something that Citi Aus has never implemented (signifying minimal Citi internal business development initiatives locally).

The eventual buyer might be facing significant other business debt investments in order to modernise the Citi systems too.

However, this Citi asset sale could go for a bargain. According to the new Citi global head, as reported this morning on CNBC, she is in a hurry to sell off under-performing or mature, low growth assets. A good situation if you're a potential buyer?

 

[_flyer]

I suspect the main benefits as already mentioned will be eventually enhanced©.

100%

 

[RooFlyer]

Other existing banks in AU are possibly too small to bid.

Not a bank, but what about a post IPO Latitude? Major empire builder in charge there.

 

[Must...Fly!]

Thank you! And the FOREX rates were as good as Citi Plus in your experience?

Honestly I'm not sure, I haven't used it very often for such purchases

 

[AIRwin]

Citi will also cease being the issuer of Virgin Saver accounts and any accounts will be closed on 1 June 2021.

 

[Supersonic Swinger]

I wonder if this is the final nail in the coffin for Diners Club in Australia:

- Unlike American Express they aren't heavily championed globally by their US parent
- Citi has let their acceptance drop to the point that only "most" major retailers accept them
- Other than offering the companion card, they haven't done anything to aggressively promote uptake in two decades
- I can't see a BofQ or HSBC bothering with the hassle of dealing with such a dying niche and if they had to buy it with the rest of the whole portfolio, shutting it down quickly

 

[SIA1A]

I wonder if this is the final nail in the coffin for Diners Club in Australia:

I have a 'full' Diners as well as Citi's companion Diners. The only reason I keep (and pay for) the full Diners is for the unlimited access it gives me to overseas airport lounges. This benefit has been useless during Covid and Citi's limited access as a Premier benefit largely duplicates the Diners benefit.

I'm not currently travelling OS so the benefit of international lounge access has no attraction. However, post-Covid the Diners airport lounge deal might have some value if Diners continues to support this feature.

The Citi Premier airport lounge benefit looks to be doomed: Citi Premier provided a basic free membership of Priority Pass that, in turn, has a deal with the world's largest independent airport lounge operator, Plaza Premium.

It appears that the Priority Pass relationship with Plaza Premium will cease on 30/6/21. If that's happens, the value of Citi's Premier offer re airport lounge access will be diminished (unless Citi can set up alternative arrangements by 30/6) and, separately, one wonders where the Diners lounge access feature will end up.

There are currently some minor differences between the lounges that can be accessed via Priority Pass compared with lounge access via Diners.

 

[jakeseven7]

Citi will also cease being the issuer of Virgin Saver accounts and any accounts will be closed on 1 June 2021.

All 3 Virgin banking customers better get themselves new banking arrangements

 

[oz_mark]

Citi will also cease being the issuer of Virgin Saver accounts and any accounts will be closed on 1 June 2021.

So BoQ are issuing the new accounts themselves?

 

[cove]

Citibank have always been fringe dwellers in the Australian market.
in the US Citi are really on the ball.
Australian Citi cards may end up with Latitude or even BOQ.
Ahmed Fahour who is now at Latitude did work at Citi a few years ago.
Mrscove has used Citibank debit for getting cash in the US and UK.

 

[jakeseven7]

Citibank have always been fringe dwellers in the Australian market.
in the US Citi are really on the ball.
Australian Citi cards may end up with Latitude or even BOQ.
Ahmed Fahour who is now at Latitude did work at Citi a few years ago.
Mrscove has used Citibank debit for getting cash in the US and UK.

Hope not BOQ, they only discovered the internet last year

 

[Chicken]

Here is another article which has a lot more details:

From Manila to Seoul, Citigroup ends an era of pan-Asian retail banking

Yes I'm still at Citi because they have just completed the renewal and variations of my home loan accounts, which took them over 3 months to do; however, Citi has a long history of being one of the first foreign banks in many countries, and this exercise will be ending their 100+ years of histories in multiple countries, so I do feel kinda sad.

(signifying minimal Citi internal business development initiatives locally).

It's not a local Citi thing, it's global. Citi had a project, where they wanted local businesses to leverage global and minimise local customisation. The result wasn't exactly what they had hoped.

For those who have an interested in transformation projects (I love them but I also hate them), I recommend this interesting read: Memoirs of a Citibank technology warrior

The eventual buyer might be facing significant other business debt investments in order to modernise the Citi systems too.

You can't exactly do that, because you are buying the customers, you are not buying the Citi's IT system. Not that you could physically do that. You would just migrate the customers into your own system, like how Advance Bank records were frozen then moved over into St George.

So BoQ are issuing the new accounts themselves?

Hope not BOQ, they only discovered the internet last year

BoQ just bought ME Bank from industry super funds, so how they handle and integrate maybe an indication? That is, if they still have the ability to buy Citi consumers in Australia after buying ME Bank.