Citigroup Inc. (C), the U.S. lender disposing of unwanted assets, sold a private banking subsidiary with about 3,000 accounts to Reliance Financial Corp. Terms weren’t disclosed.
Reliance will acquire Citigroup Trust-Delaware NA and merge the company with its own subsidiary, Atlanta-based Reliance said in a statement. The deal should be completed by the end of this quarter if regulators approve, the firm said.
Chief Executive Officer Michael Corbat, 52, is selling assets and operations that are no longer considered part of the New York-based bank’s core operations. Trust-Delaware manages trust accounts that hold assets for some of the wealthiest clients.
“These are fine relationships,” said James Maxwell, chairman and CEO of Reliance, in a phone interview. “However, they are part of a market segment that really is too small for Citi.”
Many of the accounts were tied to Smith Barney, the brokerage that Citigroup previously owned outright, Maxwell said. Reliance will hire 30 Citigroup executives who help manage these accounts, he said.
Citigroup, ranked third by assets among U.S. banks, agreed to sell Smith Barney in stages to New York-based Morgan Stanley (MS) in 2009. Trust-Delaware was not part of that transaction, Chantel Shipe, a spokeswoman for Reliance, said in an e-mail.
Paul James, CEO of Citi Private Bank’s trust business, said in the statement that Citi Trust will still provide trust and estate services to “high-net worth and ultra-high-net worth clients of Citi Private Bank through our Delaware, New York and South Dakota centers.”
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