Citi Brazil announced today that it has reached a definitive agreement with Banco Itaú Unibanco to sell Credicard, its non-banking credit card and consumer finance business, subject to approval by Brazilian regulatory authorities.
"Brazil is a very important growth market and is an essential part of Citi's Latin American footprint and global network. This transaction demonstrates how we are finding ways to optimize our businesses and focus on specific segments in the emerging markets, consistent with our global strategy," said Francisco Aristeguieta, CEO Citi Latin America. "We have done business in Brazil for 98 years and will continue to grow our institutional and retail consumer banking businesses in the country."
The transaction, once approved by Brazilian regulators, is expected to generate a gain on the sale of approximately US$300 million after-tax ($0.10 cents per share) at closing. The business activities will be reflected in discontinued operations beginning in the second quarter of 2013.
The transaction includes 96 Credicard stores and approximately US$3.260 billion in consumer loan balances as of December 31, 2012. Included in the transaction are the portfolios of Credicard-branded credit cards, as well as a personal loan portfolio. The transaction does not include Corporate cards, the Citi and Diners branded portfolios, and the Credicard Platinum portfolio (except for Exclusive), or Credicard American Airlines cards, which will be migrated to the Citi brand and will continue to be managed by Citi.
Citibank's retail branch network will not be affected by this transaction.