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Citi to Vend APAC Merchant Acquiring Business to Wirecard
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Citigroup Inc. (C - Free Report) inked yet another deal in continuation with its efforts to boost returns by streamlining operations. The Wall Street banking giant is set to sell its Asia Pacific (APAC) customer portfolio for merchant acquiring to Germany-based payment and issuing company, Wirecard AG.
The deal includes the entire customers for merchant acquiring services in Singapore, Hong Kong, Macau, Malaysia, Taiwan, Indonesia, Philippines, Thailand, India, Australia and New Zealand. Notably, the customer portfolio of Citigroup's merchant acquiring business in 11 markets in APAC includes over 20,000 merchants. These merchants are in airlines, financial services, luxury goods, retail, along with technology and telecommunications.
The deal is expected to close by Jun 2018, in stages. Financial terms of the transaction remain undisclosed.
“This sale is consistent with Citi’s strategic objective to efficiently allocate resources to grow our core businesses and products. The sale of the Merchant Acquiring businesses in Asia is consistent with our global strategy, whereby Asia is the last remaining region in Citi with Merchant Acquiring businesses. We are pleased to have reached this agreement with Wirecard who will invest further in what is a core asset for them,” said Sean Hesh, Citi’s Asia-Pacific Regional Head of Merchant Acquiring.
Citigroup exited its merchant acquiring businesses in other regions in 2005. Asia is the last market from where it plans to exit. The company's long-term strategy to prune non-core assets and increase its fee-based business mix is likely to improve valuation over time.
We remain encouraged as Citigroup continues with its repositioning and restructuring initiatives, while remaining focused on resolving several internal setbacks, including legal issues. We anticipate these streamlining initiatives to boost the company’s capital position, reduce expenses and drive operational efficiencies.
Last week, Citigroup also completed the vending of its institutional Prepaid Card Services to Wirecard. The deal was signed in Jun 2016.
Citigroup currently carries a Zacks Rank #3 (Hold). Shares of the bank gained 30.7% over the last six months; underperforming the 34.8% growth for the Zacks categorized Banks – Major Regional industry.
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 61.3% over the past six months. It currently holds a Zacks Rank #2.
Enterprise Financial Services Corp (EFSC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the past six months, the company’s share price has been up more than 42%. It carries a Zacks Rank #2.
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One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
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Citi to Vend APAC Merchant Acquiring Business to Wirecard
Citigroup Inc. (C - Free Report) inked yet another deal in continuation with its efforts to boost returns by streamlining operations. The Wall Street banking giant is set to sell its Asia Pacific (APAC) customer portfolio for merchant acquiring to Germany-based payment and issuing company, Wirecard AG.
The deal includes the entire customers for merchant acquiring services in Singapore, Hong Kong, Macau, Malaysia, Taiwan, Indonesia, Philippines, Thailand, India, Australia and New Zealand. Notably, the customer portfolio of Citigroup's merchant acquiring business in 11 markets in APAC includes over 20,000 merchants. These merchants are in airlines, financial services, luxury goods, retail, along with technology and telecommunications.
The deal is expected to close by Jun 2018, in stages. Financial terms of the transaction remain undisclosed.
“This sale is consistent with Citi’s strategic objective to efficiently allocate resources to grow our core businesses and products. The sale of the Merchant Acquiring businesses in Asia is consistent with our global strategy, whereby Asia is the last remaining region in Citi with Merchant Acquiring businesses. We are pleased to have reached this agreement with Wirecard who will invest further in what is a core asset for them,” said Sean Hesh, Citi’s Asia-Pacific Regional Head of Merchant Acquiring.
Citigroup exited its merchant acquiring businesses in other regions in 2005. Asia is the last market from where it plans to exit. The company's long-term strategy to prune non-core assets and increase its fee-based business mix is likely to improve valuation over time.
We remain encouraged as Citigroup continues with its repositioning and restructuring initiatives, while remaining focused on resolving several internal setbacks, including legal issues. We anticipate these streamlining initiatives to boost the company’s capital position, reduce expenses and drive operational efficiencies.
Last week, Citigroup also completed the vending of its institutional Prepaid Card Services to Wirecard. The deal was signed in Jun 2016.
Citigroup currently carries a Zacks Rank #3 (Hold). Shares of the bank gained 30.7% over the last six months; underperforming the 34.8% growth for the Zacks categorized Banks – Major Regional industry.
Stocks to Consider
U.S. Bancorp (USB - Free Report) has been witnessing upward estimate revisions for the last 60 days. Further, the stock surged over 27% over the past six months. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 61.3% over the past six months. It currently holds a Zacks Rank #2.
Enterprise Financial Services Corp (EFSC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the past six months, the company’s share price has been up more than 42%. It carries a Zacks Rank #2.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>