To make this acquisition, however, Citi would likely have to suspend its $1.2 billion buyback in 2013 and will likely repurchase fewer shares in 2014 as well, according to the analyst.

Other large banks are also likely to be interested in the portfolio. "Given how deposit-rich and asset-starved banks are today, we think bank shareholders will receive a potential deal well -- so long as the potential buyer pays, at most, a modest premium (5%) for the asset," Penala wrote.

Wells Fargo could be a close contender in the bidding process, according to the report. Though the deal makes less strategic sense for the bank, Wells has previously expressed interest in partner cards and the "deal economics is solid" according to Penala.

JPMorgan Chase is, however, likely "too distracted to bid," given that it remains "laser-focused" on meeting capital and liquidity compliance this year.

USBancorp and TD Bank are likely to be more interested in parts of the portfolio than the whole, according to the analyst.

-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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