Citi selling $1.6B retail credit card assets to GE

NEW YORK (AP) — Citigroup is selling $1.6 billion in retail credit card assets to GE Capital as the bank continues to shed smaller businesses to focus on its core consumer banking operations.

The New York-based bank, which was one of the top recipients of federal bailout aid, is restructuring operations as it recovers from the recession and credit crisis. In preparation for unraveling the one-stop financial services marketplace model it created in the late 1990s, Citigroup (C) last year split itself into two parts — Citicorp and Citi Holdings. The latter holds the retail card portfolio and other riskier assets including the mortgage-backed securities that undermined the bank and other financial institutions during the market meltdown.


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Citi recently said it was exiting the private student loan business, selling its 80% stake in Student Loan Corp. and about $32 billion in related assets to Discover Financial Services and the student lender Sallie Mae. In June, Citi sold $3.2 billion in auto loans to Spain's Banco Santander and divested its Canadian MasterCard business to Canadian Imperial Bank of Commerce, trimming its assets by about $2 billion.

The latest transaction gives GE Capital access to nearly 36 retail portfolios, including cards for retailers such as Home Depot, Sears Holdings and Macy's, along with businesses including Shell and ExxonMobil. The portfolio services more than 40 million customers and consists of about $50 billion in managed assets. Citigroup Inc. will service the portfolio until the first quarter as GE Capital finishes converting merchants and cardholder accounts to its system.

"This acquisition is right in line with GE Capital's goal to invest in core, high performing growth businesses where we have deep experience and broad capabilities to grow," Mark Begor, president and CEO of GE Capital Retail Finance, said in a statement.

GE Capital, the financing arm of General Electric, also was devastated last year by the financial meltdown but has seen profits strengthen in recent quarters. Its second-quarter earnings rose 93% to $830 million as units that provide loans for businesses, store credit cards and energy projects improved. GE Capital's lending for office buildings and other commercial properties has continued to suffer losses, however.

Terms of the deal with were not disclosed, but the companies said Wednesday that the sale has received regulatory approval.

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