Citigroup Inc. is soliciting potential buyers for its subprime lending unit CitiFinancial, the Financial Times reported Friday morning, citing sources it did not identify.
The New York banking company is in the early stages of talks with possible bidders, including private equity firms and other finance companies, the FT reported. A sale could fetch up to $1 billion, according to the story.
CitiFinancial is part of Citi Holdings, a collection of businesses that the company has been trying to sell for the last two years. But as recently as July, Citigroup CEO Vikram Pandit said he was in no hurry to sell CitiFinancial and that he did not intend to shut it down, as Wells Fargo & Co. had just done to a similar unit.
"As a matter of fact, it is a business that we continue to like," Pandit said then, "and while it may or may not fit — and as we said, it may not fit — in our ongoing strategy, it's certainly extremely valuable to somebody, and we are not inclined to do anything unless we find somebody else who sees the value."
A Citi spokeswoman declined to comment Friday morning.
Last year CitiFinancial closed more than 300 U.S. branches and stopped making new loans at more than 180 other locations to prepare for a sale.
Citi Holdings had assets of about $421 billion at the end of the third quarter. Citi expects the unit to account for less than 20% of its total assets following fourth-quarter results, the spokeswoman said.
Citi has been shedding other businesses from Citi Holdings in recent months. In September, it sold Student Loan Corp., in which it owned a majority stake, to Discover in a $600 million deal. In October, it sold $1.6 billion in store card receivables to GE Capital, a subsidiary of General Electric Co.