Citigroup Inc. said Monday that it had agreed to sell its auto finance unit to Dime Bancorp.
The unit has a $930 million loan portfolio and relationships with over 1,100 lenders. Terms of the deal were not disclosed, though Dime chief executive Lawrence J. Toal deemed it "attractive."
Citigroup, which is leaving noncore, low-return businesses, sold its Newbridge Securities unit to Donaldson, Lufkin & Jenrette in March.
Auto finance represents a step up in profitability for thrifts, said Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods. Mr. Theurkauf said Dime is "trying to move into higher-yield strategies."
The Melville, N.Y., location of Citigroup's auto business may have appealed to Dime, which serves New York, New Jersey, and Connecticut. Dime will consolidate most of its consumer operations in Melville, Mr. Toal said.