Citigroup Inc (NYSE:C) initiated second round of auction for its credit card business in Japan along with its retail unit. The bank has received joint offer from three companies with Shinsei Bank Ltd. (TYO:8303) as the primary investor in the business. The deal is likely to settle between $247.18 million to $411.90 million.
The three primary companies involved in the joint bid include Shinsei Bank Ltd. (TYO:8303), Isetan Mitsukoshi Holdings Ltd. (TYO:3099), and JCB Co Ltd, credit card service company. Shinsei Bank is the primary investor in the deal and JCB Co Ltd is likely to offer support in credit card account settlements and Isetan offering department store shopping services to the clients.
Sumitomo Mitsui Banking Corp, Sumitomo Mitsui Trust Bank, Shinsei Bank Ltd, and Resona Bank were among primary bidders taking part in the second round of auction after clearing the first round in September.
Citigroup Inc (NYSE:C) is withdrawing from consumer banking business in 11 different markets to focus on more profitable ventures. The shares of the financial group are trading at $56.08 with 7.62% increase in share prices year-to-date.
Earlier this week, Citi announced closure of one of its internal-trading platforms amid increasing regulatory pressure from the federal authorities. LavaFlow, one out of four internal-trading platforms of the group, facilitates trading of particular stocks and is considered as an alternative trading system (ATS).
The platform was responsible for a $2.85 million legal fine out of the $5 million fine paid by Citigroup Inc (NYSE:C) in July this year. According to the government authorities, LavaFlow couldn’t protect confidential consumer information in 2008 to 2011 period.
Citigroup Inc (NYSE:C) reported net revenues of $19.6 billion in third quarter 2014 with net income of $3.4 billion. The group announced exits from 11 markets during the presentation and these markets include Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru along with Korean consumer finance unit.
This article has been written by Prakash Pandey.