Citibank payout offer is rejected - ResearchInChina

Date:2008-06-19liaoyan  Text Size:

CITIGROUP Inc offered 1,350 employees at its consumer finance unit in Japan early retirement with two months' pay as the company withdraws from the business, a proposal the workers' union called unacceptable.

CFJ KK, Citigroup's local consumer finance unit, made the offer in a memo distributed to all its employees and provided to Bloomberg News by Akihito Kawamura, chairman of CFJ's labor union. Citigroup's Tokyo-based spokeswoman Atsuko Yoshitsugu declined to confirm the document, which was addressed from Masanori Hogi, CFJ's chief administrative officer.

"We can't accept this offer," Kawamura said yesterday in Nagoya, central Japan, calling two months' pay insufficient. "We've asked all employees not to accept this, and we plan to negotiate with management."

Citigroup, the biggest United States bank by assets, will close all of its 32 consumer finance branches and 540 automated loan machines in Japan and transfer capital to more profitable areas, the company said on June 6. The New York-based firm is revising global operations after reporting losses and writedowns from the US subprime mortgage crisis totaling US$42.9 billion, more than any other bank, according to data compiled by Bloomberg.

Employees have until July 15 to apply for the plan, according to the memo.

"CFJ ensures employees are treated fairly and made aware of the options open to them," Citigroup's Yoshitsugu said, declining to comment further.

The bank has declined 62 percent in New York Stock Exchange composite trading in the past year.

Citigroup has been scaling back its consumer finance business in Japan for the past three years. The company said in January 2007 it would shut about 80 percent of its consumer finance branches in the country, a month after new laws capped the interest rate local non-bank lenders can charge.

Japan passed legislation in 2006 to lower the maximum rate to 20 percent, matching the highest rate for banks, from 29.2 percent.

Japanese lawmakers said they aimed to end abusive lending practices and ease the debt burden of consumers.

Citigroup said last month it will close two UK loan operations, eliminating about 700 jobs, and stop offering certain home and personal loans.

2005-2011 www.researchinchina.com All Rights Reserved 京ICP备05069564号-1