Citibank 2008 Annual Report Download - page 141

suite of corporate banking, consumer and wealth management products and
services to more than one million clients through 55 branches in Taiwan.
This transaction will strengthen Citigroup’s presence in Asia, making it the
largest international bank and 13th largest by total assets among all
domestic Taiwan banks. Results for BOOC are included in Citigroup’s Asia
Consumer Banking, Global Cards and Securities and Banking businesses
from December 1, 2007 forward.
EMEA
Acquisition of Quilter
In 2007, the Company completed the acquisition of Quilter, a U.K. wealth
advisory firm with over $10.9 billion of assets under management, from
Morgan Stanley. Quilter has more than 18,000 clients and 300 staff located
in 10 offices throughout the U.K., Ireland and the Channel Islands. Quilter’s
results are included in Citigroup’s Global Wealth Management business
from March 1, 2007 forward.
Acquisition of Egg
In 2007, Citigroup completed its acquisition of Egg Banking plc (Egg), one
of the U.K.’s leading online financial services providers, from Prudential PLC
for approximately $1.39 billion. Egg offers various financial products and
services including online payment and account aggregation services, credit
cards, personal loans, savings accounts, mortgages, insurance and
investments. Results for Egg are included in Citigroup’s Global Cards and
EMEA Consumer Banking businesses from May 1, 2007 forward.
Purchase of 20% Equity Interest in Akbank
In 2007, Citigroup completed its purchase of a 20% equity interest in Akbank
for approximately $3.1 billion, accounted for under the equity method of
accounting. Akbank, the second-largest privately owned bank by assets in
Turkey, is a premier, full-service retail, commercial, corporate and private
bank.
Sabanci Holding, a 34% owner of Akbank shares, and its subsidiaries have
granted Citigroup a right of first refusal or first offer over the sale of any of
their Akbank shares in the future. Subject to certain exceptions, including
purchases from Sabanci Holding and its subsidiaries, Citigroup has otherwise
agreed not to increase its percentage ownership in Akbank.
Consolidation of Brazil’s CrediCard
In 2006, Citigroup and Banco Itau dissolved their joint venture in CrediCard,
a Brazilian consumer credit card business. In accordance with the
dissolution agreement, Banco Itau received half of CrediCard’s assets and
customer accounts in exchange for its 50% ownership, leaving Citigroup as
the sole owner of CrediCard.
STRATEGIC DIVESTITURES
The following divestitures occurred in 2008 and do not qualify as
Discontinued operations:
Sale of Upromise Cards Portfolio
During 2008, Global Cards sold substantially all of the Upromise Cards
portfolio to Bank of America for an after-tax gain of $127 million ($201
million pretax). The portfolio sold had balances of approximately $1.2
billion of credit card receivables.
Sale of CitiStreet
On July 1, 2008, Citigroup and State Street Corporation completed the sale of
CitiStreet, a benefits servicing business, to ING Group in an all-cash
transaction valued at $900 million. CitiStreet is a joint venture formed in
2000 which, prior to the sale, was owned 50 percent each by Citigroup and
State Street. The transaction closed on July 1, 2008, and generated an
after-tax gain of $222 million ($347 million pretax).
Divestiture of Diners Club International
On June 30, 2008, Citigroup completed the sale of Diners Club International
(DCI) to Discover Financial Services, resulting in an after-tax gain of
approximately $56 million ($111 million pretax).
Citigroup will continue to issue Diners Club cards and support its brand
and products through ownership of its many Diners Club card issuers around
the world.
Sale of Citigroup Global Services Limited
In 2008, Citigroup sold all of its interest in Citigroup Global Services Limited
(CGSL) to Tata Consultancy Services Limited (TCS) for all-cash
consideration of approximately $515 million, resulting in an after-tax gain
of $192 million ($263 million pretax). CGSL was the Citigroup captive
provider of business process outsourcing services solely within the Banking
and Financial Services sector.
In addition to the sale, Citigroup signed an agreement with TCS for TCS
to provide, through CGSL, process outsourcing services to Citigroup and its
affiliates in an aggregate amount of $2.5 billion over a period of 9.5 years.
Sale of Citigroup Technology Services Limited
On December 23, 2008, Citigroup announced an agreement with Wipro
Limited to sell all of Citigroup’s interest in Citi Technology Services Ltd.
(CTS), Citigroup’s India-based captive provider of Technology Infrastructure
support and Application Development, for all-cash consideration of
approximately $127 million. A substantial portion of the proceeds from this
sale will be recognized over the period in which Citigroup has a service
contract with Wipro Limited. This transaction closed on January 20, 2009
and a loss of approximately $7 million was booked at that time.
Sale of Citi’s Nikko Citi Trust and Banking Corporation
Citigroup has executed a definitive agreement to sell all of the shares of
Nikko Citi Trust and Banking Corporation to Mitsubishi UFJ Trust and
Banking Corporation (MUTB). At the closing, MUTB will pay an all-cash
consideration of 25 billion yen, subject to certain purchase price
adjustments. The sale is expected to close on or around April 1, 2009,
pending regulatory approvals and other closing conditions, and result in an
estimated after-tax gain of $53 million ($89 million pretax).
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