On May 27, 2025, Citigroup Inc. announced that its Polish subsidiary, Citi Handlowy, has agreed to sell its consumer banking business to Velobank. This move aligns with Citigroup’s ongoing strategy to exit non-core retail banking markets, a plan that has been underway for several years. While the transaction is financially immaterial to Citigroup, it is expected to result in a modest regulatory capital benefit upon completion.
Companies Involved
Citigroup Inc. is a leading global financial services company with approximately 200 million customer accounts and operations in more than 160 countries and jurisdictions. Its Polish unit, Citi Handlowy, has been a significant player in Poland’s banking sector, offering a range of financial services to individual and corporate clients.
VeloBank is a universal bank in Poland that provides modern financial solutions for individual clients, private banking, SMEs, large enterprises, and public sector institutions. The bank operates over 160 branches across Poland and offers advanced online and mobile banking platforms. Velobank’s strategy focuses on technology, including generative AI solutions, to enhance client and employee convenience.
Transaction and Deal Structure
The specific financial terms of the transaction between Citi Handlowy and Velobank have not been disclosed. However, the deal is part of Citigroup’s broader strategy to streamline its global operations and focus on strategic financial services. The sale is expected to result in a modest regulatory capital benefit for Citigroup upon closing.
Previously, Velobank underwent a significant ownership change when an affiliate of Cerberus Capital Management L.P., along with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), acquired 100% of Velobank’s shares from Poland’s Bank Guarantee Fund. The acquisition included a PLN 687 million injection into Velobank to meet its regulatory requirements.
Impact on the Industry
This transaction signifies a notable shift in Poland’s banking landscape. Citigroup’s exit from the Polish consumer banking market reflects a broader trend of global banks reassessing their international retail operations to concentrate on core markets.
For Velobank, acquiring Citi Handlowy’s consumer banking business presents an opportunity to expand its customer base and strengthen its position in the Polish market. The bank has already demonstrated significant growth, acquiring nearly 300,000 new customers and increasing deposit balances by PLN 16 billion since the beginning of 2023.
The Polish banking sector is experiencing steady growth, with total banking assets projected to reach PLN 3.5 trillion by the end of 2025. Velobank’s expansion through this acquisition aligns with the sector’s positive trajectory and the increasing demand for digital and customer-centric banking solutions.
Conclusion
Citigroup’s sale of its Polish consumer banking business to Velobank marks a strategic move for both institutions. While Citigroup continues to streamline its global operations, Velobank is poised to enhance its market presence and cater to the evolving needs of Polish consumers. This transaction underscores the dynamic nature of the banking industry and the ongoing realignment of global banking strategies to adapt to changing market conditions.