According to a report in the Wall Street Journal, Citi and GE reached an agreement on the sale of about $1.6 billion of the banking company's credit card debt. However, that is a relatively small amount when compared to what Citigroup wants to free itself from.
The report said Citi Holdings, the banking giant's division in charge of reducing its unwanted loans, securities and businesses, held about $465 billion in assets as of June 30. That includes CitiFinancial North America, the company's biggest consumer finance business. However, the amount has been whittled down by about 20 percent, from $582 billion in the second quarter of 2009, when Citi decided to try to sell or cut down assets that didn't "fit with its banking strategy."
Currently, Citi Holdings makes up about 24 percent of Citigroup, the report said.
The credit card debt Citi sold to GE was taken on using cards it did not issue under its own brand. Rather, they are "retail partner" loans, for which delinquency rates are slightly higher than for its normal accounts. In all, Citi handles retail credit card businesses totaling about $50 billion for a number of large companies, such as Home Depot and Exxon Mobil.
Last month, Citi Holdings also announced it would sell the company's 80 percent share in Student Loan Corp. to Discover Financial for $600 million. It also sold $3.5 billion in commercial real estate loans to JPMorgan Chase in August, and spun off or sold several overseas ventures in Latin America, Japan and Europe.
Many lending giants may have become concerned about the state of consumer credit in America in recent months, as some people have had trouble paying off their credit card debt. While delinquencies – accounts 30 days or more behind – have declined, they're still elevated above levels observed prior to the economic crisis. The same is true of charge offs – accounts 90 days or more behind and deemed uncollectable – though the most recent statistics saw an increase in this type of credit liability for the first time in a few months.