Citigroup Inc (C.N) said on Tuesday that it would sell its Diners Club North America credit card business to Canada's BMO Financial Group (BMO.TO), as part of its strategy to shed noncore or unwanted assets.
The agreement gives BMO exclusive rights to issue Diners Club cards in the United States and Canada.
BMO, the parent of Bank of Montreal, will add nearly US$1 billion of receivables and US$7.8 billion of card transactions, and more than double its corporate card business. Many business travelers use Diners Club cards.
Terms of the transaction were not disclosed. The transaction is expected to close before the end of the March, pending regulatory approvals.
Diners Club is part of Citi Holdings, a portion of Citigroup that includes troubled or underperforming assets that the New York-based bank hopes to sell or wind down.
The remaining assets, including Citigroup's retail and investment banking franchises among others, are housed in an entity called Citicorp.
Citigroup Chief Executive Vikram Pandit is shedding assets after the bank took $45 billion of taxpayer money in a series of federal bailouts.
The bank said the Diners Club transaction is not expected to materially affect its net income or capital ratios.
Citigroup shares closed Monday at $4.28 on the New York Stock Exchange.