) completed the acquisition of
Best Buy Co., Inc.
) U.S. credit card portfolio from
Capital One Financial Corp.
). Consequently, the credit card portfolio was successfully
integrated into Citigroup's system. The portfolio is presently
worth approximately $6 billion in receivables. Citi Retail
Services - Citigroup's credit card unit - that provides service
and solutions to U.S. retailers, will supervise the portfolio
from now on.
Citi Retail Services offers consumer as well as commercial credit
card products, services, and retail solutions to national and
regional retailers throughout the U.S. The business serves
roughly 90 million accounts for a number of premier brands.
The transfer of Best Buy's card portfolio within a short span of
7 months to Citigroup shows Best Buy's eagerness to offer
unmatched service and financing options to clients. As part of
this switch, Best Buy will also be able to strengthen its
customer loyalty program - which is already quite popular in U.S.
For Citi Retail Services, the addition of Best Buy's credit
portfolio reinforces its position as a chief provider of private
label and co-branded card products to clients. The business
services accounts for a number of major brands, including
The Home Depot
). Best Buy's leadership position in consumer electronics,
combined with Citi's expertise, will likely enable better service
Citigroup's cards segment Citi Retail Services has now been able
to reinstate its former image post the financial crisis in 2008.
Consequently, the bank reverted its earlier intention to sell
some of its assets. In 2011, Former Citigroup CEO Vikram Pandit
moved the Citi Retail Services unit out of the Citi Holdings
We believe the the transition of Best Buy's credit card portfolio
to Citigroup will enhance the top line for the New York-based
bank amid the sluggish macro environment in the U.S.
Currently, Citigroup carries a Zacks Rank #3 (Hold). A
better-performing bank is
), which carries a Zacks Rank #1 (Strong Buy).
BEST BUY (BBY): Free Stock Analysis Report
BANKUNITED INC (BKU): Free Stock Analysis
CITIGROUP INC (C): Free Stock Analysis Report
CAPITAL ONE FIN (COF): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
SEARS HLDG CP (SHLD): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.