Exclusive: Fortress, others eye Citi's OneMain consumer finance unit

Fri Feb 21, 2014 3:37pm EST
 
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By Greg Roumeliotis and Paritosh Bansal

NEW YORK (Reuters) - Citigroup Inc (C.N: Quote) has been approached by Fortress Investment Group LLC (FIG.N: Quote) and some other private equity firms about a potential deal for its consumer finance business, OneMain Financial, according to two people familiar with the situation.

The bank has not made a decision yet about whether to sell the business, which makes personal loans through a network of about 1,100 branches, one of the sources said.

OneMain is part of Citi Holdings, which Citigroup created during the financial crisis to park assets it wanted to eventually divest or wind down.

The nature of the private equity firms' proposals and the timing and status of these conversations could not be learned, but the sources said a deal could come together this year.

A Citigroup spokesman declined to comment. Fortress, majority owner of consumer finance company Springleaf Holdings Inc LEAF.N, did not respond to requests for comment. Springleaf declined to comment.

The identity of the other private equity firms interested in OneMain could not be learned.

In December, Citigroup Chief Financial Officer John Gerspach said at an industry conference that while the business was profitable it did not fit with the bank's target audience. The bank has been focusing on wealthier customers, while OneMain caters to lower-income people.

"We continue to evaluate all options for exiting OneMain," Gerspach said at the time.   Continued...

 
A man walks past a Citibank branch in lower Manhattan, New York October 16, 2012. REUTERS/Carlo Allegri