The South Korean subsidiary of Citigroup has reportedly announced that it will partner with the nation's largest bank, KB Kookmin Bank, as well as the internet-only Toss Bank, for the transferring of its portfolio of unsecured personal loans, worth approximately ₩8 trillion ($6.1 billion).
The approach is a part of Citibank Korea's decision, made public in October of last year, to shut down its retail banking activities following the failure of its months-long pursuit for a buyer of the company.
In April of 2021, the firm’s parent group, US banking heavyweight Citigroup, decided to withdraw its consumer banking operations from Korea among 13 countries, largely in Asia, with CEO Jane Fraser stating that the bank does not have the scale required to compete.
Through the most recent agreement, retail customers of Citibank Korea will be able to refinance their personal loans with Toss Bank or KB Kookmin and receive favorable interest rate and benefits for loan repayment.
The application for transfer can be filed through the official KB Kookmin Bank's mobile app, Toss Bank app, or any of the bank's offline locations.
On requested anonymity, a KB Kookmin executive stated that KB Kookmin offers a comparable lending system in terms and circumstances to Citibank Korea, therefore it is convenient for consumers to switch to KB.
An employee of Toss Bank previously disclosed that Citibank Korea was considering partnering with one commercial bank and one online-only bank in this country for the refinancing of personal loans.
Account holders can extend the existing loans' maturity date at Citibank Korea till the end of 2026 if they seek to meet loan maturity.
Citibank Korea was supposedly facing issues negotiating with the two banks due to the US Federal Reserve's rapid rate hikes, which were sending shockwaves across the Korean market and impacting borrowing rates there.
As per a regulatory filing, Citibank Korea reported a net loss of ₩796 billion ($610 million) in 2021 as a result of offering its staff retirement packages totaling ₩1.1 trillion ($843 million).
According to regulatory records, KB Kookmin Bank's first-quarter net profit increased 41.9% year over year to ₩977.3 billion ($749 million), whereas Toss Bank reported a net loss of ₩65.4 billion ($50.1 million).
Source credit: https://www.koreaherald.com/view.php?ud=20220622000701