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Report: P-E shops eyeing up Citi's consumer finance unit

  • OneMain Financial (formerly CitiFinancial) is housed in Citi Holdings - a crisis-era creation of Citigroup (C +0.3%) to house assets it wished to sell or wind down. Speaking recently at a conference, CFO John Gerspach said the business was profitable, but did not fit with the wealthier customers the bank is targeting.
  • Among the P-E firms sniffing around is Fortress Investment Group (FIG), a majority owner of another subprime finance player, Springleaf Holdings (LEAF +6.4%). Fortress picked up its stake in Springleaf from AIG amid the financial crisis. A combination of Springleaf and OneMain has been bandied about for years, and Hank Greenberg and Sandy Weill talked about a deal more than a decade ago when they respectively ran AIG and Citi.
  • The sale of OneMain presents a dilemma for Citi: One hand it continues to chip away at the assets in Ciit Holdings - $117B at year's end vs. a peak of more than $875B - but, the business is profitable and the bank needs the income stream to help take advantage of its $53B in DTAs. One option would be the sale of a minority stake.
Comments (2)
  • Citi should keep all profitable "bad bank" assets.
    21 Feb, 05:24 PM Reply Like
  • Why sell it for someone else to improve it and make money out of it ??? .The time for fire sales is over , next thing in a year or two we will hear them buying things and paying a premium.Sounds like "stupid is as stupid does "
    22 Feb, 03:14 PM Reply Like
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