New York: Citigroup is looking for buyers for CitiFinancial, the largest consumer finance company in the US, a move that would raise hundreds of millions of dollars for the banking behemoth, according to a media report.
British daily Financial Times has reported the deal would also mark “a milestone in the bank’s efforts to break with its troubled past”.
Quoting people close to the situation, the publication said that Citi had been contacting potential buyers for CitiFinancial, which was one of the building blocks in its ill-fated plan to become an all-purpose “financial supermarket”.
Ravaged by the financial meltdown in 2008-09, Vikram Pandit-led Citigroup resorted to massive restructuring that also saw its businesses being split into two -- Citicorp and Citi Holdings.
“... talks with likely bidders, which could include private equity groups and other finance companies, were at an early stage and no deal was imminent,” the report said.
Attributing to Wall Street executives who have looked at the business, the daily said that CitiFinancial sale could garner up to $1 billion but “warned that the final price would depend on the financing package Citi offers to potential buyers to help fund the business.”
CitiFinancial is part of Citi Holdings, a collectio of Citi’s non-core businesses.
The entity has more than 1,500 branches and about two million customers. The entity was adversely impacted by the financial turmoil, primarily as lower-income people defaulted on personal and residential loans.
As per the report, Citi in 2009 shut down over 300 CitiFinancial branches, stopped making loans at another 184 and rebranded the remaining 1,500 outlets OneMain Financial.