By Na Jeong-ju
Staff Reporter
Citibank Korea CEO Ha Yung-ku denied rumors again, Wednesday, that its parent Citigroup Inc. may close its South Korean business as part of restructuring of its global assets, saying the U.S. financial group is still confident about business potential here.
The lender is now seeking to improve its governance structure by setting up a holding company next year after establishing a Smith Barney-style retail service-oriented brokerage company, he said.
``To Citigroup, Korea is a priority country (for its global businesses),'' Ha told reporters in Seoul. ``Citibank Korea has posted strong earnings growth and is preparing reaching out to other areas. The rumors about the sale of Citibank Korea are totally groundless.''
Since the rumors began circulating about 10 months ago, they have affected the morale of employees and the bank's customer relations, he said.
Citibank Korea is Citigroup's largest investment in Asia. It has the largest customer base and the largest amount of assets among all of the group's units in the Asia Pacific.
Citibank Korea is the best among all lenders in South Korea in terms of capital adequacy and asset quality. It is now focusing on creating synergy by embedding Citigroup's differentiated global products and global brand image into the domestic sales operations and its relationship with corporate and individual clients, the bank said.
It announced earlier in the morning that its net income increased by 8.1 percent from a year ago to 149.8 billion in the first quarter of this year. Return on assets and return on equity were 1.13 percent and 16.20 percent, respectively.
Ha said the bank plans to launch a holding company early next year as part of efforts to increase its shares in the areas of credit card and securities-related businesses and retail banking.
``The setup of a holding company will enable us to establish a stable business portfolio through balanced growth between banking and non-banking subsidiaries,'' the CEO said.
As early as in June, the bank will apply for a securities business license and set up a brokerage unit, Citi Securities Korea. It will focus on personal wealth management like Smith Barney, Ha said.
The bank plans to expand its domestic sales network in 2008. Citibank Korea will open 10 new branches and its consumer financing unit, CitiFinancial, will open 15 more outlets, according to the bank.