In addition, Citigroup will increase reserves by $375 million after tax, in the final quarter of 2006, reflecting current estimates of losses from increased customer settlements in the business.
Furthermore, the company will also take an approximate $40 million after tax repositioning charge in the final quarter of 2006, which will include expenses related to the closing of around 270 branches and 100 automated loan machines.
Citigroup’s Japan consumer finance segment is expected to report a net loss of $370 million for the fourth quarter in 2006, taking into account the increase in reserves and repositioning charge. In 2007, it is anticipated to break even.
The repositioning is in line with the group’s efforts to establish a lower-cost platform to enable it to compete effectively in the new rate environment in Japan.
