Citi today announced the successful completion of the sale of Citibank Privatkunden AG & Co. KGaA, its German retail banking operation, and certain of its affiliates, to Crdit Mutuel-CIC, a leading French banking group.
Crdit Mutuel-CIC paid an all-cash consideration of Euro 5.2 billion (US$6.6 billion), which includes an estimate of 2008 earnings through closing. The transaction results in an estimated after-tax gain of approximately US$4 billion, including the impact of a benefit of a currency hedge put in place post-signing. Citi’s Tier 1 capital ratio for the third quarter ended September 30, 2008, on a pro forma basis for the close of the transaction is expected to be higher by approximately 60 basis points.
“The transaction is another strategic step that significantly strengthens Citi’s key capital ratios and allows us to reallocate capital to the best growth opportunities for the overall franchise. We are especially pleased the franchise and employees remain in good hands to serve our retail banking customers in the future. I want to thank all the employees of Citibank Germany for their hard work building a great business and for staying focused during the transaction process,” said Citi CEO Vikram Pandit. “Germany remains an important market for Citi’s institutional clients business and our commitment to drive our clients’ financial success is unwavering.”
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