Citi has sold its Canadian MasterCard business
to the Canadian Imperial Bank of Commerce (CIBC) furthering its
strategy to reduce assets within Citi Holdings in order to focus on
the profitability of Citicorp.
CIBC has previously only issued Visa cards and
said in a statement it expects the sale to boost its earnings
during the first year of operation.
“Through this transaction, CIBC, which had
more than C$14 billion in outstanding credit card balances at April
30, 2010, will become the largest dual credit card issuer in
Canada,” said a spokesman for CIBC.
The sale will reduce Citi’s assets in Citi
Holdings by approximately C$2 billion ($1.93 billion) and is
not expected to have a material impact on Citi’s net income or
capital ratios. The deal is expected to close by October this year
and is subject to regulatory approvals and conditions. Terms of the
sale were not disclosed by either party.
“This transaction demonstrates the continued
progress we are making in our efforts to divest non-core assets,”
said Vikram Pandit, chief executive officer of Citi. “Our team
continues to pursue opportunities to reduce assets in Citi Holdings
in a way that will create value for our stakeholders.”
“Citi remains committed to delivering on its
global strategy in Canada which includes a focus on the growth of
our core businesses,” Pandit added. “With this sale behind us, we
will continue to focus on growing our Global Banking, Global
Transaction Services and Citi Private Bank organisations,
leveraging Citi’s unique global reach to the benefit of our