Tags: Citi | British | Online | Bank | Egg | Auction

Report: Citi to Put British Online Bank Egg on Auction Block

Thursday, 05 Aug 2010 12:34 PM

Citigroup is poised to put its British online bank Egg up for auction as part of a plan to dispose of billions of dollars in unwanted assets, the Financial Times reported.

Citing people close to the situation, the newspaper reported Wednesday that Citi had been holding informal talks with potential buyers over Egg for some time and it was now preparing to start an auction for the business, most likely after the summer months.

The bank declined to comment on the report, but said in an emailed statement that its strategy to reduce assets within its non-core Citi Holdings portfolio — which includes Egg — was public knowledge.

Citigroup split into two parts in January 2009 after reporting a quarterly loss of $8.3 billion and receiving a massive U.S. government bailout.

Citicorp handles the firm's traditional banking work, while Citi Holdings — which makes up less than a quarter of the group's balance sheet — includes toxic assets and noncore businesses.

Egg has around 2 million customers. When Citi bought it in 2007, it was a loss-making business but the bank has never made its financials public.

A disposal of Egg would follow the sale last month of Citigroup's private-equity unit to StepStone Group and Lexington Partners, which was also part of Citi Holdings and helped to reduce assets by $1.1 billion.

A U.S. unit of Spain’s largest bank, Santander, reached an agreement with Citi to acquire $3.2 billion auto loan portfolio in June.

But efforts to find a buyer for the group's $50 billion portfolio of retailers' credit-card loans have been challenging, people familiar with the assets have said.

Egg, which Prudential PLC created before selling it to Citi for 575 million pounds ($912.6 million), could attract interest from United Kingdom and international groups, including Santander and Tesco's bank, according to some analysts.

Virgin Money, one of Egg's rivals, is not interested in Egg, a spokesman told Reuters.

"We have a plan to grow our presence on the high street and Egg would not help us to do that," the spokesman said.

Tesco declined to comment. Tesco Bank Chief Executive Benny Higgins said late last year that he was focusing on organic growth.

A person familiar with the matter said that Santander had no immediate UK targets on its radar following its 1.65 billion pound purchase of more than 300 branches from Royal Bank of Scotland on Wednesday.

Santander declined to comment.

© 2017 Thomson/Reuters. All rights reserved.

 
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Citigroup is poised to put its British online bank Egg up for auction as part of a plan to dispose of billions of dollars in unwanted assets, the Financial Times reported. Citing people close to the situation, the newspaper reported Wednesday that Citi had been holding...
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2010-34-05
Thursday, 05 Aug 2010 12:34 PM
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