Citigroup (NYSE: C) is retrenching from some of the wealthiest U.S. suburbs, abandoning part of its years-long efforts to cultivate affluent customers in areas including Main Line Philadelphia.
The New York bank this month said that it would cut 11,000 jobs and 84 branches, including 44 locations in the United States. The bank said then that it would close locations in Pennsylvania, Massachusetts and New Jersey; now it turns out that 13 of the affected branches are in the Philadelphia suburbs, in counties that regularly make lists of the country's richest and that serve as bedroom communities to white-collar workers in Philadelphia, Wilmington and even New York City.
The cuts come as new chief executive Michael Corbat tries to accelerate Citigroup's recovery from the financial crisis that almost toppled it. But while Corbat has said he remains committed to the bank's "unparalleled global network and footprint," he is withdrawing from some of the markets and customers in that footprint — including some of the high-end customers coveted by his predecessor.
Citigroup representatives said Wednesday the bank's strategy remains unchanged. And its physical network has never been able to match the branch-on-every-corner dominance of rivals JPMorgan Chase (JPM) and Bank of America (BAC). But former CEO Vikram Pandit spent years trying to convince wealthy, urban, tech-savvy people to do their banking at Citigroup's carefully cultivated collection of storefronts. Two years ago, Pandit presided over a grand ribbon-cutting ceremony at a gleaming new branch in New York City's Union Square, which was supposed to presage an effort to open new branches across the country.
Now Corbat is pulling back. While Citigroup will maintain branches within the Philadelphia city limits and in nearby New Jersey, it is closing 13 branches in suburbs including Villanova, Berwyn, Abington and Doylestown. (Last week, the bank closed a branch in Fairless Hills, Penn., near Trenton.)
Several of those towns are part of Bucks and Montgomery counties, which had median household incomes of $76,019 and $78,446 respectively between 2007 and 2011, according to the U.S. Census. That's more than twice as much as the median household income within Philadelphia over the same period: $36,957.
Citigroup spokeswoman Catherine Pulley said in an email that the bank is "continually acting on opportunities to optimize our branch network to best serve our clients. These actions include opening, renovating and in some instances closing or relocating branches. This is all part of our strategy to serve clients with excellence throughout the world's top cities such as Philadelphia."
The 13 branches will close on March 15. About 90 of Citigroup's 800 area employees will lose their jobs as a result of the closures, Pulley said.
The closures were first reported by the Philadelphia Business Journal this week