Citigroup moves into Best Buy credit cards
NEW YORK (AP) — Citigroup said Tuesday that it will start issuing Best Buy branded credit cards.
The New York-based bank is buying Capital One Financial Corp.'s portfolio of the electronics retailer's cards, with loan balances of about $7 billion. Capital One will end its credit card agreement with Best Buy Co. Inc. earlier than planned.
Financial details on the transaction were not disclosed, but Capital One said its proceeds from the sale would roughly equal the book value of the accounts, so it expects no significant loss or gain on the sale. Citi said the deal won't have a significant effect on its earnings this year.
The bank already issues and manages credit cards and related products for retailers like Home Depot, Macy's and Sears. In a statement, Citi Retail Services CEO Bill Johnson said the bank was taking the opportunity "to grow and enhance Best Buy's relationships with their loyal and valued customers."
Capital One, which has looked to expand its credit card operations in recent years, didn't say why it was selling.
The banks said they expect the purchase to be finalized in the third quarter.
Shares of Citigroup Inc. rose 72 cents, to $44.56, in midday trading. Capital One shares slipped 42 cents to $53.60.