Citigroup Completes Best Buy Acquisition - Analyst Blog
) 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 ExxonMobil ( XOM ), Macy's ( M ), Sears ( SHLD ), Shell ( RDS.A ) and The Home Depot ( HD ). Best Buy's leadership position in consumer electronics, combined with Citi's expertise, will likely enable better service for customers.
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 division.
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 BankUnited, Inc. ( BKU ), which carries a Zacks Rank #1 (Strong Buy).
BEST BUY (BBY): Free Stock Analysis Report
BANKUNITED INC (BKU): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
CAPITAL ONE FIN (COF): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
SEARS HLDG CP (SHLD): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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