Citigroup, Inc (NYSE: C) is working on simplifying its retail checking offerings which will provide more choice for consumers but potentially leave consumers with higher fees as the bank faces difficulty in generating revenue in its retail business as a result of the Dodd-Frank financial reform act.
Under the company’s new setup, retail customers that use Citibank’s Basic Banking account will be able to waive monthly maintenance fees by completing five qualifying transactions per statement period, which include direct deposits, debit card purchases, bill payments, auto deductions, and ATM cash withdrawals. Customers that don’t meet the minimums will be charged $8.00 per month beginning in November. Previously, customers paid between $3.00 and $10.00 per month.
The bank also has a mid-level account for customers that maintain a combined balance of $6,000 in linked accounts. Customers that don’t meet that level will be charged a maintenance fee of $20.00, up from the previous range of $9.50 to $15.00. Linked accounts can include checking, savings, credit cards, CDs, investment, mortgages, retirement accounts and lines of credit.
The new checking packages are part of a larger overhaul of Citigroup, Inc (NYSE: C)’s U.S. retail operations for a more targeted and simplified strategy. The New York-based bank said earlier in the year that it plans to focus on its retail business in the U.S., although it seeks for international growth as well. Citi has previously cut the number of checking account packages that it had from six to four.
Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc. In May 2010, the Company announced the creation of a new Collateral Management Services unit within its Securities and Fund Services business.
Shares of Citigroup, Inc (NYSE: C) traded up 0.77% on Friday, ending the week at $3.91.
