NEW YORK (
consumer finance unit,
, is apparently having some trouble as it moves forward a reorganization plan.
reported early Tuesday that delinquent consumer loans from the troubled unit jumped more than expected as Citi moves 750,000 customer accounts to new locations. The article cited a person briefed on the matter.
According to the article, CitiFinancial's delinquency rate was 0.25% percentage points higher than executives had forecast as it closes some 330 branches and another 180 are converted to troubled loan servicing centers,
Citigroup's North American consumer-lending business, which includes the consumer finance unit, had $15.4 billion in personal loans at June 30, according to
The higher delinquency rate could pare CEO Vikram Pandit's efforts to eventually sell the unit, which was deemed a non-core business in January 2009 and placed as part of Citi's bad bank entity, Citi Holdings.
But Citigroup has had trouble unloading CitiFinancial and other non-core businesses as the markets took a turn for the worse in 2009. The bank has had better success this year including its March spin-off of
The big money-center bank had previously said that it was looking to pare assets by roughly 40% from its peak in the third quarter of 2007 of $2.36 trillion. Citigroup also revealed in June that it would downsize the consumer finance unit in order to streamline the business.
Citigroup declined to offer more details on the subject to
. A spokesman said in an emailed statement: "CitiFinancial is successfully implementing the reorganization plan announced earlier this summer, and we are pleased with our progress to date."
Citigroup shares were most recently falling 6 cents, or 1.6%, to $3.70 on volume of roughly 70 million shares. The stock has been struggling in recent months to regain the $5 threshold it hit in April following a positive first-quarter earnings report. Citigroup shares are up just 13% year to date, far below the nearly 50% gain it had following first-quarter earnings.
--Written by Laurie Kulikowski in New York.
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