Citigroup 'could retain CitiFinancial stake'

9 March 2011

Sources close to American banking giant Citigroup have indicated that it could seek to retain a stake in its CitiFinancial division, which is currently up for sale as part of a wider restructuring program.

According to Reuters, Citi is looking into a range of options in an attempt to attract potential buyers - including offering some financing to bidders - as it seeks to rid itself of $359 million worth of peripheral operations and problem assets.

The financial firm held $600 million in troublesome stocks in March 2009 and despite efforts to break up some areas of its business, Citi remains burdened by bad assets valued at up to 20 per cent of its overall worth.

CitiFinancial is understood to be a prime candidate for a sell-off because its clients are predominantly individuals on lower incomes. The insiders suggested that as many as ten interested parties are considering some form of offer.

Last month the Wall Street Journal reported that Citi could stand to lose up to $4 billion in covering the costs of a string of lawsuits which arose following the banking crisis of 2008.

By Gary Cooper

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