Citigroup Inc. said Thursday that it would sell its CitiFinancial Canada unit to an investor group led by private-equity firms J.C. Flowers & Co. and Vä rde Partners.
Terms of the transaction weren't disclosed, and Citi doesn't expect the deal to materially impact earnings.
CitiFinancial Canada makes small loans to customers who might not qualify for traditional loans, often at high, subprime rates. Subprime lending was a key part of Citigroup's strategy before the financial crisis.
But in recent years Citigroup has been slimming down those operations and focusing on wealthier customers andits retail business in the U.S., Asia and Mexico. Last year, Citigroup sold OneMain Financial, a bigger subprime unit focused on U.S. customers.
CitiFinancial Canada is one of the last remaining units left in Citi Holdings, the "bad bank" unit Citigroup created after the financial crisis to store assets the bank is selling or winding down. Citi Holdings had about $64 billion in assets at the end of the third quarter, after starting with about $900 billion. CitiFinancial Canada represented about $1.9 billion in assets and 217 branches across Canada, according to a joint press release.
Citi said it would still serve its core institutional and consumer businesses in Canada.
J.C. Flowers and Vä rde both have other investments in the financial services space.
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(END) Dow Jones Newswires
November 17, 2016 12:45 ET (17:45 GMT)
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