Citigroup to scale back branches and build online banking presence

Citigroup (C), trying to recreate its image, intends to reduce the number of brick and mortar branches and intensify its online-banking presence. The new plan will be presented to Citi's board members in October, according to a report in the Wall Street Journal. Citi will keep branches concentrated in six cities: New York, Washington, Miami, Chicago, San Francisco and Los Angeles. Branches in Texas will likely be sold off and those in Boston and Philadelphia may or may not remain open.

Citi was never branch intensive. Right now, Citi has about 1,000 branches in the U.S. compared to 5,000 apiece for Bank of America (BAC), J.P. Morgan Chase (JPM) and Wells Fargo (WFC). Citi fell far behind the pack when JP Morgan bought Washington Mutual and Wells Fargo bought Wachovia. About 75 percent of Citi's branches are actually outside the U.S. and Citi plans to focus more on corporate clients and its non-U.S. operations. In the United States, it plans to cater primarily to affluent customers with jumbo mortgages and credit cards.