GE Capital solidified its position as the nation's biggest issuer of private
label credit cards with the $1.6 billion acquisition of Citigroup's retail
credit portfolio. Under the agreement, GE would take over financing for some of
the country's best-known consumer retail brands, including Macy's, Sears, and
Home Depot. The deal also includes popular gas cards, including programs
operated for ExxonMobil and Shell.
The retail financing division of General Electric has enjoyed tremendous success with its private label consumer credit card programs in recent years, despite some of the economic setbacks that hampered Citi's expansion attempts. The Associated Press reports that the unit's earnings have bounced back from recent lows, growing 93% during the second quarter of 2010.
According to AP reports, both credit card issuers obtained regulatory approval before the deal was announced to reporters. Citi has sold off billions of dollars in non-core lending portfolios over the past year, as it faces government and shareholder pressure to recapitalize after the 2008 financial crisis. Company officials anticipated that integration of the Citi credit card accounts into GE's systems would take between three to six months.
About the Author
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.