Citi, State Street Sell Joint Venture

Citigroup(C Quote) is selling another piece of its sprawling empire, as the bank continues to retool amid mounting writedowns and losses.

The bank and partner State Street(STT Quote) said they are selling their employee benefits joint venture CitiStreet to ING Group(ING Quote) for $900 million in cash. The deal is expected to close in the third quarter.

CitiStreet, which provides recordkeeping, administration and investment services to more than 16,000 retirement plans and 12 million participants, was formed in 2000 between Citi and State Street. Each company owns 50% of the business, which has $262 billion in assets under administration.

"CitiStreet is an industry leader, but retirement plan recordkeeping and administrative services are not strategic priorities for us," Charles Johnston, president of Citi's global wealth management, said in a release. "Smith Barney remains committed to serving corporate and business clients with retirement plans and other institutional offerings and we will work closely with ING and State Street to ensure an orderly transition for clients and employees."

Boston-based State Street says the deal enables the trust and processing bank to "more effectively pursue opportunities that will continue to build on its global franchise focused on servicing institutional investors."

The move further underscores Citi CEO Vikram Pandit's desire to sell or unwind non-core assets as the New York-based financial titan struggles to maintain capital levels as the credit crisis and housing downturn continues.

Pandit has been aggressively repositioning the business and attempting to gain a handle on what many call a unwieldy super-financial conglomerate. The company is reorganizing its businesses to be arranged by geographic location. It has also announced a total of 30,000 job eliminations over the past year or so -- with an additional 9,000 announced last month along with first-quarter earnings results.