SHANGHAI/HONG KONG Citigroup (C.N) will close its about three-year-old private banking unit in China, where the third-largest U.S. bank by assets once tried to attract money from fast growing millionaires, sources familiar with the situation said on Tuesday.
In principle, the closure of Citigroup's private banking unit will not affect its existing top-end individual clients in China as they will be automatically folded into Citigroup's consumer banking arm, which serves less wealthy customers, said the sources.
Several dozen employees who are currently working for the China unit will be internally transferred to other positions, in particular to its consumer banking business, said the sources who declined to be identified as they were not authorised to speak to the media.
So far, Citigroup's private banking businesses elsewhere in Asia, including Hong Kong and Singapore, are being operated normally and it is unclear whether the decision to close the China operation would herald similar restructuring in other locations, said the sources.
A Citigroup spokesman in Shanghai declined to comment.
The closure of Citigroup's China private banking unit also comes at a time when the New York-based lender is close to selling a stake in its Smith Barney retail brokerage business to Morgan Stanley (MS.N), in an effort to shore up its balance sheet.
Both its private bank and Smith Barney are under Citigroup's wealth management group.