Citigroup Inc has held talks with private equity groups and hedge funds over the sale of $3 billion in car loans in a move to clear troubled assets from its balance sheet, according to a report by the Financial Times.

Citigroup is believed to have offered to provide the buyers of the loans with financing for a few years after the sale, according to the report in the electronic edition of the newspaper.

Some private equity groups and hedge funds said the assets were less attractive due to the lack of a thriving market for securitized bonds, which are backed by cash flow from loans, the newspaper said.

Citigroup could not be immediately reached for comment.

(Reporting by Jessica Hall; Editing by Bernard Orr)