Job losses as Citigroup exits UK sub-prime market

by Gill Montia

Story link: Job losses as Citigroup exits UK sub-prime market

Citigroup has announced the closure of Future Mortgages, which specialises in providing first and second mortgages to sub-prime borrowers.

The US bank is also winding up CitiFinancial, a provider of unsecured loans, which like Future Mortgages operates through intermediaries.

In the case of Future Mortgages, borrowers (thought to number around 92,000) will be transferred to other divisions of the group and the terms of their loans will remain the same.

Up to 700 job losses are expected; the group will be closing its Doxford call centre operation near Sunderland, where it employs 400 staff, plus 49 CitiFinancial branches, employing 300 people in total.

The bank has indicated that it will honour all applications currently being processed but that no new business will be accepted from tomorrow.

The move is in line with Citigroup’s strategy of expanding its UK personal finance business through its Citi and Egg brands.

The loss of Future Mortgages will impact on the already decimated UK sub-prime home loan market.

According to financial website, Moneyfacts, the number of sub-prime mortgages on offer has declined from 7,000 to 1,500, in the past 12 months.