American bank Citigroup has announced that it will be removing itself from the British mortgage market, closing down its mortgage division, Future Mortgages and CitiFinancial, its unsecured loans department.
The bank currently has 92,000 customers, the majority of which are sub-prime customers, customers with poor credit history or high risk borrowers. Those customers will continue to be serviced by Citigroup on their current terms in other divisions of the bank.
The move will result in the loss of 700 jobs as call centres and branches across the country are closed. The bank has suggested that some of those employees may be offered jobs in other divisions.
Future Mortgages specialised in providing both first and second mortgages to sub-prime customers and was a leader in the market. Darren Cook, of the Moneyfacts website, said: “This is another blow for the sub-prime market.”
Bert Pijls, Citigroup’s business manager for UK lending said that CitiFinancial and Future Mortgages had not been identified as areas for growth and were consequently being shut down. He said the bank would focusing on the Citi and Egg brands instead.
Citigroup is according to certain data, the largest bank in the world. As it lends primarily to sub-prime borrowers, it has been hit hard by the credit crunch and defaulting customers.
In the United States, Citigroup was one of the worst hit lenders by the sub-prime implosion which has been taking place. As a result, Charles Prince, chief executive was let go and his successor Vikram Pandit has announced plans to cut at least 9,000 jobs.
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