Terms of the transaction weren’t disclosed on November 17, 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. Sub-prime lending was a key part of Citi’s strategy before the financial crisis.
But in recent years Citi has been slimming down those operations and focusing on wealthier customers and its retail business in the US, Asia and Mexico. Last year, Citi sold OneMain Financial, a bigger subprime unit focused on US customers.
CitiFinancial Canada is one of the last remaining units left in Citi Holdings, the “bad bank” unit Citi 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.
JC Flowers and Värde both have other investments in the financial services space.
This article was published by The Wall Street Journal