Citi sells more branches in Texas to BB&T
Reuters
Published Sep 03, 2014 03:15PM ET
Citi sells more branches in Texas to BB&T
(Reuters) - Citigroup Inc (N:C) agreed to sell another 41 branches in Texas to BB&T Corp (N:BBT) as the third-largest U.S. bank cuts back on brick-and-mortar outlets and focuses on online banking.
The disposal follows the sale of 21 branches in the state to BB&T in December. Citi also sold its retail banking and credit card business in Spain to Banco Popular (MC:POP) in June and, according to a source, is considering selling its Japanese retail banking operations.
The latest sale includes retail branches in Dallas, Houston and Midland that had $2.3 billion in deposits and $87 million in loans.
Citi said on Wednesday its branch network in Texas did not provide the scale to capture future growth and market share in traditional retail banking.
Citi, led by Michael Corbat, has been seeking buyers for about 50 branches holding $3 billion of deposits in California, Bloomberg reported in April.
The company's retail banking business has been struggling. Income from continuing operations at the unit fell 46 percent in the second quarter. Revenue from the business accounts for nearly a quarter of total revenue.
The bank had 3,463 branches in 35 countries as of June 30, with a little over a third of them in North America, according to a filing.
The latest purchase will boost BB&T's total branches in Texas to 123 with $5.3 billion of deposits.
BB&T said it would pay a premium to book value of about 5.3 percent of total deposits.
Citi said the sale was not material to its earnings and that it would continue its other businesses in Texas.
Deutsche Bank Securities was financial adviser and Wachtell, Lipton, Rosen & Katz provided legal counsel to BB&T for the deal.
Citi's shares, which have gained about 6 percent in the past one year, were up 1 percent at $52.49 on the New York Stock Exchange on Wednesday. BB&T's shares were up marginally at $37.73 in early market trading.
(Reporting by Anil D'Silva and David Henry; Editing by Saumyadeb Chakrabarty)
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Written By: Reuters
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