Indian Express

Express India

Screen

Loksatta

Express Cricket

Kashmir Live

Biz Publications
 
| Make this your homepage | Feedback

Citi sells unit to Credit Mutuel


Posted online: Saturday , July 12, 2008 at 01:48 hrs
Updated On: Saturday , July 12, 2008 at 01:48 hrs


Font Size

Print

Feedback

Email

Discuss
Rate This Article
1 2 3 4 5 6 7 8 9 10
Rating:  0

Citigroup Inc, the largest US bank, agreed to sell its German consumer unit to France’s Credit Mutuel Group for 4.9 billion euros ($7.7 billion) to shore up capital.

The Paris-based customer-owned bank will pay the amount in cash, plus the equivalent of Citibank Privatkunden AG’s 2008 earnings, New York-based Citigroup said in a Business Wire statement today. Credit Mutuel, France’s second-largest bank by branches, gains the market leader for consumer loans in Germany with 340 branches and about 3.2 million clients.

Citigroup, reeling from losses on subprime-infected assets, is selling the unit as chief executive officer Vikram Pandit disposes of $400 billion of assets. Credit Mutuel beat out Deutsche Bank AG, Germany’s biggest bank. The sale of Citibank may be the first in a wave of takeovers in Germany because Deutsche Postbank AG, the country’s biggest consumer bank by clients, and Allianz SE’s Dresdner Bank are also up for sale.

“Citibank gives the French lender a great foothold in the German retail market,” said Konrad Becker, a Munich-based analyst at Merck Finck & Co. “Now Deutsche Bank will have to concentrate on getting Postbank.”

Deutsche Bank CEO Josef Ackermann needs to expand more stable businesses such as consumer banking and asset management to offset a decline in investment banking. The Frankfurt-based bank is bidding for Postbank to gain its 14.5 million customers and 850 branches.

Deutsche Bank last week agreed to buy commercial-lending units in the Netherlands for 709 million euros from Fortis. It also bought German lenders Norisbank and Berliner Bank for 1.1 billion euros in 2006.

“The sale of Citibank eliminates one more option and makes Postbank that more attractive,” said Robert Minde, an analyst at BHF-Bank AG in Frankfurt. “Postbank would fit Ackermann’s strategy of bolstering the stable businesses.”

Takeovers will shake up financial services in a market still dominated by state-owned lenders where “tooth-and-claw” competition has sapped profitability, Citigroup analysts said in a February report.

Bloomberg

Ads by Google

Post Comments

Comments: (Limit 3,000 characters)
Name
Message
Email ID
Subject
TERMS OF USE:
The views represented here are not neccesarily endorsed by www.financialexpress.com and its allied websites. All messages will be moderated and no message that has inflammatory, abusive, derogatory language or any language deemed unfit for publication by the editor will be displayed. Though it will be endeavoured that as many messages as possible be displayed, there will be time lag between the submission and publication of the messages. The website reserves the right to publish or reject any message.
I agree to the terms of use.

Comments
Shaadi Matrimonials
Get Marriage Proposals by Email EVERYDAY!
Register FREE on Naukri.com.
200000+ Hot Job Openings!
Yatra Offers
10% cash back on Master Card
Send Gifts
Flowers and Gifts
Express Classifieds
Post and view free classifieds ad
Express Astrology
Know what's in the stars for you