Citigroup plans to close two sub-prime lenders

| May 20, 2008 | 0 Comments

Citigroup has said it plans to close two of its UK lending arms putting 670 jobs at risk.

The world’s largest bank is proposing to shut down mortgage supplier Future Mortgages and CitiFinancial, a personal loans business. Both businesses stopped lending to new customers last week.

Future Mortgages has around 26,000 customers and less than 1% share of the UK’s mortgage market. CitiFinancial has around 66,000 customers with personal and home-owner loans, with a typical advance in the £5,000 region.

400 employees at the Sunderland office and around 270 in its UK branch network are being consulted about the plans.

The Sunderland site is expected to close by mid-next year while 49 branches are set to be shut down over the next few months.

Bert Pijls, business manager for Citigroup’s UK consumer business, said Future Mortgages and CitiFinancial were not identified as areas for strategic growth.

We are committed to ensuring that staff who are potentially impacted by these proposals are treated fairly and made aware of all the options open to them, added Mr Pijls.

Since the start of the credit squeeze, the bank has announced 13,200 job cuts and has suffered huge losses as a result of the sub-prime mortgage crisis.

Earlier this year, US banking giant Morgan Stanley announced it would close its Cheshire-based Advantage Home Loans, which resulted in the loss of 160 jobs.

Tags: , credit squeeze,

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