(By Balaseshan) Citigroup Inc. (NYSE:C) said it has agreed to sell its Diners Club UK and Republic of Ireland issuing businesses as part of its continued strategy to lower assets held in Citi Holdings.
Citi has agreeed to sell its Diners Club card issuing businesses in UK and Republic of Ireland to private investor group Affiniture Cards Ltd. for an undisclosed sum.
The transaction marks continued progress in Citi's strategy to reduce the assets and businesses within Citi Holdings, its portfolio of non-core operating businesses and assets.
Citi's strategy to reduce the assets held in Citi Holdings is made in an economically rational manner while working to generate long-term profitability and growth from Citicorp, its core franchise.
Under the terms of the transaction, the group will acquire payment card accounts in these countries ensuring continuity and seamless service to cardholders during migration.
Citi said the Affiniture management team has extensive experience in the cards and payments industry.
Citi Holdings was created in the wake of the financial crisis as part of Citi's restructuring plan. Citi Holdings consists of several business entities including balance interests in local consumer lending such as OneMain Financial, divestitures such Smith Barney, and a special asset pool.
Citi reported second quarter EPS of $1.00 and revenue of $18.8 billion, excluding the impact of negative credit valuation adjustment (CVA)/ debt valuation adjustment (DVA) and a net gain on minority investments. Analysts, on average, had expected earnings of $0.89 per share on revenue of $18.76 billion.
Citigroup's tier 1 common ratio rose to 12.7% for the second quarter from 11.6%, while tier 1 capital ratio increased to 14.4% from 13.6%. The company's cost of credit was 17% below the prior year period.
The shares of Citi closed Friday's regular session up 4.66% at $27.40. The stock has been trading between $21.40 and $38.40 for the past 52 weeks.