CM-CIC buys German Citi arm for $6.6B

French mutual bank Crédit Mutuel-CIC has acquired Citigroup Inc.'s German arm, Citibank Deutschland, for $6.6 billion. Citigroup divested its German arm, which was started in 1926, as part of its restructuring after the bank suffered billions of dollars in losses during the subprime crisis.

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"The transaction is another strategic step that significantly strengthens Citi's key capital ratios and allows us to reallocate capital to the best growth opportunities for the overall franchise," Citi CEO Vikram Pandit said in a press release. Pandit has slowly been divesting international arms of Citi to shore up losses.

Crédit Mutuel-CIC is going to run the acquired business, which includes 340 locations and assets of $15.6 billion with deposits of $11.8 billion, under the Citibank brand until 2010.

Citi started shopping its German retail operations unit in April. Germany's Deutsche Bank AG also bid for the operations, Reuters reported. - Maria Woehr

Also see:
Bove interview: Citigroup may sell to Deutsche Bank
Citi no longer can afford to own Indian back-office services
Two bidders left in Citi's auction of its German unit

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