By Kristin Jones
Citigroup Inc.'s (C) private bank has agreed to sell a portion of its U.S. trust business to privately-held Reliance Financial Corp. as it seeks to reduce its non-core assets.
The financial terms of the deal were not disclosed.
Under the terms of the transaction, Atlanta-based financial services and wealth management company Reliance Financial will acquire 100% of the stock of Citigroup Trust-Delaware, N.A. The acquisition consists of around 3,000 accounts and $1.7 billion in assets under administration.
Citi Private Bank, which offers financial products and services to wealthy individuals and families, said that the business represents a non-target market.
"We are pleased to have reached this agreement with Reliance Trust Company which will enable them to take over the management of this portion of our business in North America," said Paul James, chief executive of Citi Private Bank's trust business. "Citi Trust in North America remains focused on providing its full suite of trust and estate services to the high net worth and ultra high net worth clients of Citi Private Bank through our Delaware, New York and South Dakota centers."
Michael Roberts, president of Reliance Trust Company of Delaware, said the deal will allow the company "to increase its size, scale and overall nationwide footprint in the personal trust business."
The deal also boosts Reliance Financial's market share and is in line with its focus on the institutional marketplace, Chief Executive James T. Maxwell said.
Citigroup reported earlier this month that its fourth-quarter profit rose more than 25%, but fell short of investor expectations as legal expenses in the U.S. consumer business hurt profits. The banking giant is in the midst of changes under the fresh leadership of Chief Executive Michael Corbat, who in December outlined plans to cut jobs, close branches and retreat from consumer banking in a handful of countries in an effort to reduce costs.
Citigroup shares were trading up 29 cents in recent trading to $42.07. The stock has risen 66% in the past six months.
Write to Kristin Jones at [email protected]
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