670 jobs under threat at Citigroup

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Citigroup said it was proposing to shut down mortgage supplier Future Mortgages, and its CitiFinancial loans arm. Both businesses will stop lending to new customers from this Wednesday.

Around 400 people serving the firms are based at an office in Sunderland, Tyne & Wear, with another 270 employed at a chain of CitiFinancial offices across the UK.

US-based Citigroup, which also owns the Egg credit card business in the UK, said it was proposing to close the Sunderland site by mid-2009 at the earliest, with the 49 branches facing closure over the next few months. Staff consultations with workers affected are under way.

The banking group has been one of the worst-hit by the global sub-prime lending crisis, suffering a series of multi-billion dollar write downs on risky investments. Last month it announced plans to cut at least 9,000 jobs from its 370,000 global workforce as part of a shake-up.

Future Mortgages has around 26,000 customers and less than 1% share of the UK's mortgage market. CitiFinancial boasts around 66,000 customers with personal and home-owner loans, with a typical advance in the £5,000 region.

Administration of both business's loans will transfer elsewhere into the Citigroup empire under the closure plans. They follow a strategic review of Citigroup's consumer business in the UK.

Bert Pijls, business manager for Citi's UK consumer business, said: "We are committed to ensuring that staff who are potentially impacted by these proposals are treated fairly and made aware of all the options open to them."

They are the latest sub-prime lenders to be targeted for closure in the wake of the sub-prime crisis.

Earlier this year US bank Morgan Stanley announced its Cheshire-based Advantage Home Loans business would be shutting, with the loss of 160 jobs.