Citibank partners with KB, Toss Bank for W8tr to complete loan portfolio transfer
Citigroup’s South Korean subsidiary said it would cooperate with local financial giant KB Kookmin Bank and Internet-only Toss Bank to transfer its portfolio of unsecured personal loans worth about 8 trillion won ( $6.1 billion).
The move is part of Citibank Korea’s decision announced in October last year to close its retail banking operations in stages, after its months-long attempt to find a buyer for the business failed. Its parent company and US banking giant Citigroup decided in April last year to pull its consumer banking business from Korea in 13 countries, mostly in Asia, with its CEO Jane Fraser saying they “don’t have the scale” necessary to be competitive.
The latest partnership will allow retail customers of Citibank Korea to refinance their personal loans with KB Kookmin or Toss Bank with interest rate and loan repayment benefits. The transfer request can be submitted through KB Kookmin Bank offline branches and its mobile app or Toss Bank official app.
“KB Kookmin offers a very similar lending system in terms of terms and conditions to Citibank Korea, so it should be convenient for customers to move to our bank,” a KB Kookmin official told the Korea Herald under the guise of anonymity.
A Toss Bank official had told the Korea Herald earlier that Citibank Korea was considering entering into an agreement with a commercial lender and an internet-only bank here for the refinancing of personal loans.
For customers who wish to meet the maturity of loans to Citibank Korea, they can extend the maturity date of existing loans until the end of 2026.
Citibank Korea reportedly struggled to negotiate with the two banks in light of the US Federal Reserve’s aggressive rate hikes that sent ripples through the Korean market and affected borrowing rates here.
Citibank Korea posted a net loss of 796 billion won last year, according to a regulatory filing, after providing its employees with retirement packages worth a combined 1.1 trillion won.
KB Kookmin Bank’s first-quarter net profit jumped 41.9% to 977.3 billion won year-on-year, while Toss Bank posted a net loss of 65.4 billion won during the cited period , according to regulatory documents.
By Jung Min-kyung ([email protected])