Citigroup Inc (NYSE:C) has hushed all growing rumours and has finally succumbed to the decision to sell off its credit card segment. The esteemed bank has chosen to sell of the credit card unit to Sumitomo Mitsui Trust Bank, which carries out its banking operations primarily based at Japan. C is focussed in its drive towards growth and profitability.
Citigroup On Cost Cutting Spree
Citibank has been proactive in the realm of innovation and development. Opting to sell off the company’s credit card unit needs the courage to shrug off some segment that is not outperforming, and which can be done away with; though choosing which segment should be scrapped or sold off is always an upheaval task to handle.
The Citi cards consist of Diners Club, a Japanese brand. Local media houses reported that the deal between Citibank and Sumitomo Mitsui Trust Bank may be approximately worth $335 million or 40 billion yen.
Transaction To Close By Year-End
The transaction between the two esteemed private banks is deemed to reach its close sometime by the end of 2015. Both the banks corroborated about the interests in the deal and that it is expected to be closed by late this year. Sumitomo Mitsui Trust Holdings exercise full rights on the operations and functioning of Sumitomo Mitsui Trust Bank.
Citigroup Eager To Get Rid Of Loose Ends
Way back in December 2014, Citi Group expressed its intent to sell of its credit cards and associated retail banking operations across Japan, by selling the rights to the Japanese bank Sumito Mitsui Banking Corp or SMFG. Citigroup is drawing up robust plans to cut down its net costs in the markets. The company has desire to pull off its business in the realm of consumer banking across 11 markets, which appear to be not so profitable for the company.
Citibank is keen on cutting off loose ends and harp on the profitable segments and markets to build on them on future business endeavours.