Citigroup

(C) - Get Citigroup Inc. Report

snapped up the British card operations of

People's Bank

(PBCT) - Get People's United Financial, Inc. Report

in an effort to boost its modest presence in the U.K.

Given Citi's size and global reach, its operations in the region are surprisingly small. The deal,

announced Friday and under which Citi is paying $526 million for Connecticut-based People's card portfolio there, will boost the big bank's U.K. presence by 40%, says a Citigroup spokeswoman. The price includes the assumption of $426 million in receivables. Despite the large increase in percentage terms, Citigroup is nonetheless building from a small initial base. Income in Western Europe last year accounted for just 6.5% of the bank's $5.3 billion in core global consumer income, and the card business is only a portion of that.

"Citi is pretty small in the U.K. where every monoline seems to have set up shop," says one analyst, referring to aggressive credit card issuers such as

Providian

( PVN). Providian began building a U.K. business in early 1999 with the intent of using it as a springboard to expand in Europe.

To date, Citi's business in the U.K. includes a co-branded

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American Airlines

Aadvantage card and the modest U.K. operations inherited as part of its acquisition of

Associates last September.

Which is not to say Citi has been slow about snapping up credit card portfolios, with the financial giant acquiring about 10 in 2000 alone. And last week, a

Business Week

report suggesting CEO Sandy Weill is eyeing card giant

American Express

(AXP) - Get American Express Company Report

as a possible takeover target sent Amex's shares up more than 7%. Many viewed the story skeptically especially since the rumors have been circulating on and off for years.

Citigroup Friday fell $2.25, or 5%, to $42.75, while People's Bank slid $1.31, or 5.2%, to $23.75. Most financials were under pressure, with the

Philadelphia Stock Exchange/KBW Banks Index

, which measures the country's 24 largest banks, falling 3%.