NEW YORK (
expedited its efforts to divest itself of troubled assets by announcing on Monday that it had sold the ownership of three North American partner credit card portfolios, which represented approximately $1.3 billion in managed assets.
The card portfolios were a part of Citi Holdings, the company's so-called bad bank division, as opposed to continuing profitable operations under Citicorp. Citi said it would continue to service the portfolios through the first half of 2010, at which time the acquirer would take over the servicing aspects of the portfolios, according to a release. Citi says its entire retail partner card portfolio totals $60.9 billion in managed assets as of June 30.
Terms of the deal were not disclosed. A Citi spokeswoman declined to say whom the portfolios were sold to or how much they paid for the portfolios.
Still, it's good news considering the U.S. government owns a 34% stake in the financial institution, and Citi has been looking to shed assets as part of its efforts to wind down its bad bank, Citi Holdings.
Troubled assets still hang over the firm's future, housed in Citi Holdings. The group has inked deals for profitable noncore assets like Nikko Cordial as well as a joint venture with
for Smith Barney and some overseas divisions relatively quickly. But it has not had much luck selling off less palatable items, like Primerica, CitiMortgage, CitiFinancial and a "special pool" of toxic assets that has a loss-sharing agreement with the government.
Citi said that it "continues to make progress on its strategy and will continue to pursue opportunities within Citi Holdings that create the most value for shareholders," according to the release.
The stock had been rising since the company completed its exchange of preferred shares for common, making the U.S. Treasury its largest stakeholder. Last week, the stock hit the $5 mark for the first time since mid-January.
Shares were down 3.8% on Monday to $5.03 at 3:15 p.m. EDT.
Written by Laurie Kulikowski in New York.