Citigroup Taking Moves to Expand Consumer Lending Business (NYSE: C)

Citigroup (NYSE: C) is taking moves to expand its consumer lending business as the U.S. economy slowly begins to recover.

The New York-based financial behemoth had originally planned to be scaling back its consumer lending business, specifically mortgages, but a Friday report from Bloomberg said that Citigroup was planning on reversing that stance by increasing its purchases of home mortgage and by keeping more loans on its balance sheet.

According to a statement made by Citigroup made on Friday, a company spokeswoman commented via email that Citigroup is “committed to growing our mortgage business with a focus on quality and long-term sustainability.”

Citibank has “reengineered quality controls to be best in class and are looking to grow the correspondent channel, in a controlled, deliberate manner, with high-quality lenders who provide superior quality loans,” the statement said. It continued, “This expansion is an important step to ensuring the foundation for future success is in place.”

The ailing megabank decided in January 2009 that mortgages were no longer part of its core business and had placed its CitiMortgage unit within its “Citi Holdings” entity, which are businesses that the company plans to sell or wind-down. Since then, Citigroup has still been originating mortgages through its “Citibank” retail banking franchise.

In an interview with Bloomberg, Sanjiv Das, head of Citigroup’s U.S. mortgage business, told Bloomberg that mortgages are a “core” part of Citigroup’s business along with other consumer banking products and that the company will continue to offer mortgages through Citicorp.

“In order to be full-service consumer bank we had to be able to offer mortgages to our customers,” Das said to Bloomberg. “Then, we said let’s now start to rebuild this business.”

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