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Citigroup (C) reportedly plans the sale of its Brazilian consumer finance unit, part of the...

Citigroup (C) reportedly plans the sale of its Brazilian consumer finance unit, part of the bank's continuing plans to focus on more profitable areas. The unit - which focuses on low-income borrowers - could be a tough sell. HSBC tried and failed at selling a similar business last year.
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Comments (3)
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    Here.....anyone want to buy all my defaulted loans?....lol
    30 Jan 2013, 07:25 AM Reply Like
  • 496301
    , contributor
    Comments (8) | Send Message
     
    Good move from a capital allocation perspective, but it will all depend on the discount... And, most importantly, on the belief (strategic decision) that C will not tap that very same market a few years from now, just like Chrysler that entered and left Brazil several times in a few decades..., naturally damaging its already weak reputation (something like, well, what are your plan for next 15 seconds then...???)
    30 Jan 2013, 08:03 AM Reply Like
  • benitus
    , contributor
    Comments (2132) | Send Message
     
    It's a mistake to get out of Brazil in a hurry, which reflects short-sightedness on the part of the new CEO, because Brazil is a huge economy while the bulk of its people are small-income earners, who rely a lot on small loans. As others have observed, once Citi gets out of Brazil, it'll be hard for it to get back in, unless it wants to pay a hefty premium, because bitter memories die hard and nobody can trust Citi to stay on when the going gets tough again, having the benefit of history lessons. What needs to be done is a thorough review of its lending practices and see where are the loopholes that need tightening. Many small-loan lenders have built their fortunes successfully, e.g. in India (pioneered such business and got a Nobel prize even) and Mexico. If these countries can make it big, there's no reason for Citi not to make it big in Brazil. Citi needs to get its act together because it cannot operate small-loan business like it does with big-loan business. As I said, getting out of global business is bad, particularly as Citi has got its foothold in almost every country in the world.
    30 Jan 2013, 10:29 AM Reply Like
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