General Electric's (GE) GE Capital announced Tuesday that it had acquired the retail finance portfolios from Citigroup's (C) Retail Partner Cards to add $1.6 billion in managed assets. Financial terms of the deal were not disclosed, but GE Capital expects the transaction to immediately add to earnings.
GE Capital said the purchased loans portfolios provide consumer financing programs and related services to nearly three dozen retail chains with more than 18,000 small- to mid-sized retailers and dealers across the U.S. The retailers operate in four main segments that are core to GE Capital's Sales Finance business: home furnishings; flooring; consumer electronics; and heating, ventilation and air conditioning.
"This acquisition is right in line with GE Capital's goal to invest in core, high performing growth businesses where we have deep experience and broad capabilities to grow," said Mark Begor, president and CEO of GE Capital Retail Finance.
Bill Johnson, CEO of Citi's Retail Partner Cards said, "Selling these assets enables us to streamline the strategic operating model, including our bank legal vehicles and operating platforms, for the Retail Partner Cards business."
Both GE Capital and Citigroup have been hit hard during the financial crisis. For GE Capital, this deal marks the first consumer purchase in two years, according to Bloomberg. For Citi, the sale is a continuation of its non-core asset divestment, part of its efforts to shore up its balance sheet.