Citigroup is close to keeping its $41 billion private-label credit card division that the bank had previously marked for disposal in response to the financial crisis.
The private-label credit cards, which are issued by retailers such as Sears and Home Depot, had been pushed into the bank’s Citi Holdings unit for businesses, loans and investments that no longer fit the bank’s strategy, according to FinancialExpress.com.
Citi executives have recently started to consider shifting the private-label cards division from Holdings to a place alongside the bank’s core credit card operation as credit conditions and the outlook for other consumer businesses continue to improve.
This move would prevent the challenge the bank may face selling the entire business at once.
Citi plans to finalize its decision once it has sold OneMain Financial, its consumer-lending business, and shed or run off other assets that are currently placed within Holdings, according to FinancialExpress.com.
Citi’s private-label card business had shriveled to $41.3 billion in loans at the end of this year's first quarter, down 24 percent from a year earlier.
Credit card loans are considered to be the most financially lucrative asset classes within a bank’s portfolio.
John Gerspach, Citi’s CFO, said it is not yet determined whether or not the retail partner card business fits with the Citicorp strategy, according to FinancialExpress.com.
Last year, Citi sold $1.6 billion of the private-label card business’ managed assets to GE.