Citi agrees to sell Diners Club arm

Citi has agreed to sell its Diners Club card issuing businesses in the UK and Ireland to private investor group Affiniture Cards for an undisclosed sum.

The transaction marks continued progress in Citi’s strategy to reduce the assets and businesses within Citi Holdings, its portfolio of non-core operating businesses and assets.

Citi’s strategy to reduce the assets held in Citi Holdings is made in an economically rational manner while working to generate long-term profitability and growth from Citicorp, its core franchise.

Under the terms of the transaction, the group will acquire payment card accounts in these countries ensuring continuity to cardholders during migration.

Citi said the Affiniture management team has extensive experience in the cards and payments industry.

Citi Holdings was created in the wake of the financial crisis as part of Citi’s restructuring plan.

Citi Holdings consists of several business entities including balance interests in local consumer lending such as OneMain Financial, divestitures such Smith Barney, and a special asset pool.

Citi reported second quarter revenue of $18.8bn, excluding the impact of negative credit valuation adjustment (CVA)/ debt valuation adjustment (DVA) and a net gain on minority investments. Analysts, on average, had expected earnings of $0.89 per share on revenue of $18.76bn.

Citigroup’s tier 1 common ratio rose to 12.7 per cent for the second quarter from 11.6 per cent.