Citigroup Inc.
(C) announced on Monday the sale of ownership of three North American partnered credit card portfolios, representing approximately $1.3 billion in managed assets.
The sale constitutes the divesture initiatives taken by Citigroup to offload weak businesses and troubled assets that have caused huge losses in the past quarters. The portfolios were part of Citi Holdings, one of the company’s segments resulting from the split earlier in the year. Citi Holdings holds the company’s riskier assets and tougher-to-manage ventures, while Citicorp comprises the core franchise focusing on traditional banking around the world to generate long-term profitability.
Terms of the deals and the acquirer were not disclosed. Citigroup will continue to service the card portfolios through the first half of 2010 when the acquirer takes on those responsibilities.
In October 2008, the U.S. government injected $45 billion into Citigroup as federal bailout and is the bank’s largest shareholder, with a roughly a 34% stake.
Troubled assets still hang over the firm’s future, housed in Citi Holdings. The group has harnessed deals for profitable non-core assets like Nikko Cordial in Japan as well as a joint venture with Morgan Stanley (MS) for Smith Barney and some overseas divisions relatively quickly. But it is still struggling with lesser attractive assets like Primerica, CitiMortgage, CitiFinancial and a special pool of toxic assets that has a loss-sharing agreement with the government.
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