FOUR hundred North-East jobs
are expected to go after the
biggest US bank lost billions of
pounds on sub-prime mortgages.
Citigroup, which announced
last month that 9,000 jobs would
go worldwide in its latest round
of job cuts, announced yesterday
that it was planning to close its
mortgage supplier, Future Mortgages,
and its CitiFinancial loans
arm, based in Sunderland.
About 400 workers are employed
by Future Mortgages at
Doxford Park. The news cames
after the parent company announced
plans to cut 13,200 jobs
worldwide since January.
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Last month, the bank announced
it had made a loss of
£2.7bn in the first quarter of this
year, partly because of $12bn of
write-downs for sub-prime mortgages
and other risky assets.
A bank spokesman said that,
although Future Mortgages had
provided sub-prime mortgages, it
was a "full spectrum lender".
The group said that, from tomorrow,
the bank would stop offering
new loans by Future Mortgages
and its CitiFinancial
personal loans business.
It said it would concentrate its
UK business on its Egg credit
card brand and other Citi branded
products.
Bert Pijls, business manger for
Citi's UK consumer business,
said: "Following a strategic
review of the consumer business
in the UK, Future Mortgages
and CitiFinancial were not identified
as areas for strategic
growth.
"By proposing to focus resource
on our Citi and Egg
brands, we are reflecting Citi's
global strategy and creating a
platform for expansion in the UK
personal finance market.
"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."
The bank is proposing to close
the Doxford office and CitiFinancial's
loan centres, which employ
a further 270 people across
the UK. The bank said it was
proposing to close the Sunderland
site by the middle of next
year at the earliest, with the 49
branches facing closure over the
next few months.
Staff consultations with workers
affected are under way.
Future Mortgages has about
26,000 customers and less than a
one per cent share of the UK
market. CitiFinancial has about
66,000 customers with personal
and homeowner loans, with a
typical advance about £5,000.
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