Citigroup hopes to gain deposits digitally

By FinancialsFOXBusiness

FILE PHOTO - People walk beneath a Citibank branch logo in the financial district of San Francisco, California, U.S. on July 17, 2009. REUTERS/Robert Galbraith

Citigroup may do a lot of business banking, but as far as deposits from  individuals, it falls short.

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It is a unique circumstance for one of the four largest U.S. banks.

Deposits from individuals are an important funding source that costs little and tends to stick around.

After the financial crisis, Citigroup backed out of all but six U.S. cities and closed one-third of its branches, while rivals saw deposits grow dramatically, according to Reuters.

The bank is going after depositors digitally with a new app it plans to begin marketing in the third quarter.

Executives hope it can lure deposits without opening new branches, acquiring a rival or beating competitors' rates.

The app, which does not have a name, will reportedly augment the bank's push to expand its wealth management business.

Competing for deposits is important as interest rates rise. When banks start reporting second-quarter results on Friday, investors will be closely watching deposit levels and what they cost.

Citigroup, the third-biggest U.S. bank by assets, has 4 percent of U.S. deposits, compared with about 11 percent at JPMorgan Chase, Bank of America  and Wells Fargo, according to S&P Global.