In the wake of the coronavirus outbreak, Citigroup (C - Free Report) is temporarily closing 15% of its branches to help contain the virus spread. The lender is expected to execute the move by this weekend. The news was first reported by Reuters.
About 100 branches are to be affected by the move, whereas the remaining branches will continue to operate but with reduced working hours. Also, the company seeks to keep providing essential services to its customers by redeploying employees.
As banking is an essential service, the government has not imposed a complete shutdown on the industry. However, banks have made extensive plans for non-customer-facing staff to work from home.
Citigroup is not the only Wall Street biggie to take branch closure action. Last week, JPMorgan (JPM - Free Report) made plans to close 20% of its branches temporarily as a precautionary measure to combat the crisis.
Further, Bank of America (BAC - Free Report) seeks to reduce operating hours at its branches. Wells Fargo (WFC - Free Report) is also temporarily shuttering branches in North Carolina to slow down the spread of COVID-19. Per Charlotte Business Journal’s article, about 20 branches in the greater Charlotte region will start to close from Wednesday.
Though temporarily shut down of branches will not have any significant impact on its financials, Citigroup’s top line is likely to be affected by lower interest rates and fewer business activities during the quarter. Also, in the light of the coronavirus outbreak, the lender announced plans to suspend stock repurchase programs to maintain liquidity.
Shares of Citigroup have lost 41.2% over the past six months compared with 33.2% decline recorded by the industry.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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