Citigroup Deal Expands Central American Presence

Citigroup Deal Expands Central American Presence
On Friday, October 27 Citigroup Inc. announced its plans to acquire Central America's largest credit card company, Grupo Financiero Uno and its affiliates. The deal comes just ten days after Citigroup purchased 20 percent of Turkey's third largest lender, Akbank.

A year ago Citigroup was placed under restriction by the Federal Reserve and forbidden to make sizeable acquisitions until improvement was made in the company's internal compliance procedures. With that stricture lifted, however, Citigroup is apparently on the move again.

Although the Grupo Financiero deal was concluded for an undisclosed purchase amount, the Akbank deal was closed for approximately $3.1 billion.

Citigroup chairman and chief executive officer, Charles Prince, in the company's press release regarding the Central American purchase said, "Citigroup's acquisition of GFU is an important strategic step in our ongoing efforts to expand our consumer operations to better serve clients in Latin America."

GFU reportedly has $2.1 billion in assets, more than one million retail clients, and some 76 branches in operation. Its credit card receivables total $1.2 billion and it has deposits totaling $1.3 million in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama.

The deal, expected to close during the first quarter of 2007, is subject to regulatory approval in the United States and in the Central American nations involved.

Citigroup operates more than 1,600 retail branches and 500 consumer finance branches in Latin America and Mexico. In trading late Friday afternoon, shares of Citigroup fell 29 cents, approximately 0.6 percent, for a closing price of $50.54.


Suggest an Article Haven´t found the article you are looking for, please suggest your article. We value all your suggestions.