Citicorp Denies It Plans to Sell Merchant Unit
NEW YORK - Citicorp has no plans to sell its merchant credit card unit in the wake of recently uncovered financial irregularities, a spokeswoman for the New York banking company said.
Citicorp recently discovered the unit had been overstating its revenues by $20 million and dismissed at least one key executive.
Analysts said the overstatement had been discovered in the course of putting the unit, Citicorp Establishment Services, up for sale. Many other large credit card banks have exited the merchant side of the business in recent years to concentrate on issuing cards to consumers.
Link to Sale Is Denied
But the Citicorp spokeswoman said the discovery was a result of an "internal effort" unrelated to any effort to sell the unit.
She would not confirm job cuts except to say that Bruce Weber, the head of the group that provides transaction processing services to retailers, had left the bank.
The American Banker reported Oct. 21 that Mr. Weber had departed and Citicorp POS Information Service, a provider of transaction data and market analysis to retailers, had been merged into Citicorp Establishment Services. Bert Einloth, the head of POS Information, was put in charge of the combined unit.
The Wall Street Journal reported on Monday that Citicorp had dismissed Mr. Weber and 11 other people because of the overstatement. A source within Citicorp said that only Mr. Weber and an unidentified "financial guy" were let go because of the overstatement.
The Citicorp spokeswoman confirmed there had been an "accounting adjustment" in Citicorp Establishment Services, but said, "The restatement of revenues will not have a significant effect on the profitability of the business."