Citi has signed a definitive agreement to sell its Diners Club North America card business to Bank of Montreal (BMO). Financial terms were not disclosed.
Citi says the sale will reduce its assets by approximately $1 billion and will not have a material impact on income or capital ratios.
The Diners Club unit is part of Citi Holdings, the entity created to hold businesses the bank, part owned by the US government, is looking to sell or wind down.
Says the bank in a statement: "The sale of this business is consistent with Citi's strategy to optimise the assets and businesses within Citi Holdings while working to generate long-term profitability and growth from Citicorp, which comprises its core franchise."
The deal gives BMO exclusive rights to issue Diners Club cards to corporate and professional clients in the US and Canada. It more than double BMO's overall corporate card business and represents net receivables of almost $1 billion and approximately $7.8 billion in card transactions.
Frank Techar, president and CEO, personal and commercial banking, BMO Bank of Montreal, says: "The Diners Club North American franchise brings new card members to our company, provides attractive additional options for our existing customers, and makes us an even more compelling choice in the market for prospective commercial customers in Canada and the United States."
The acquisition, subject to certain closing conditions including regulatory approval, is anticipated to close in March.
Last year Citi signed a deal to sell the Diners Club International card payments network to Discover Financial Services in a deal worth $165 million. This September it agreed to sell its Portuguese credit card business to Barclays. The US bank has also offloaded its 17% stake in Brazilian card payment processor Redecard.