Citi sees retail bank revenue growth as it pushes on with digital plans

Despite Citi's shrinking branch presence, retail banking revenues are growing. Citi is staying the course on a multi-year branch reduction strategy. The bank shrunk its North American branch network four percent over the last year, according to its earnings report for the fourth quarter of 2017. Over the past three years, it reduced the number of branches by 16 percent and downsized existing ones -- moves that saved the bank $400 million, said Stephen Bird, CEO of global consumer banking, at Citi's investor day in July. With 694 branches in the U.S., down from 723 in the same quarter in 2016, Citi has the smallest footprint of any major American institution.

On Tuesday Citi reported 14 percent growth in its retail banking revenue to 1.2 billion from the same quarter in the previous year on checking deposits, investments, loans and commercial banking activity. In the same period, digital users grew 13 percent to 17 million, and mobile users grew 21 percent to 9 million compared to the same period the year before. Citi isn't interested in acquiring other banks, said CFO John Gerspach said on its earnings call Tuesday; mergers would bring additional branch space as the company trims its physical footprint. Future acquisitions will be aimed at generating organic growth through digital channels. Citi reported revenues of 17.3 billion. Operating expenses changed 1 percent compared to last year ($17 billion), and higher volume-related expenses were offset by efficiencies and the wind-down of legacy assets. "We're making investments in digital, and growing our franchise through digital rather than the physical footprint," he said. Instead of a legacy teller model, over the past year, the bank has rolled out "digital branches," which contain workbenches with computers that let customers review their finances, with the staffers on iPads on hand to assist as needed.