Citigroup Agrees to Sale Leaseback of Italian HQ in Milan

Reuters - June 2, 2009

Citigroup Inc (C.N: Quote, Profile, Research) will sell its Italian private banking operations and headquarters as part of the troubled U.S. bank's restructuring, a spokesman said on Tuesday.

Citigroup, the biggest foreign bank in Italy, will keep open its corporate lending unit with its 400 employees, he said, confirming a report in Il Sole 24 Ore business newspaper.

He declined to comment on the newspaper's report that the bank would sell its Italian credit card unit and close the consumer credit operations.

'We are basically focusing on the corporate business in Italy and the sale of the private bank is part of this refocusing,' he said.

Il Sole 24 Ore said Citigroup was completing the sale of the private banking unit with its 600 million euro portfolio to Spain's Banco Santander SA (SAN.MC: Quote, Profile, Research). The private banking unit has 27 employees.

The spokesman declined to comment on Santander. Citigroup has sought to sell the unit but no deal has been agreed, he said.

The bank will sell its Milan headquarters building but will lease it back, the spokesman said. Citing unconfirmed rumours, Il Sole 24 Ore said Italy's Prima SGR and the Hines Real Estate Investment Trust Inc would buy it. Prima is a joint venture between Banca Monte dei Paschi di Siena SpA (BMPS.MI: Quote, Profile, Research) and the Clessidra fund launched last month.

Citigroup has racked up more than $90 billion in credit losses and writedowns since 2007. It has taken about $45 billion from the U.S. government's Trouble Asset Relief Program. Sphere: Related Content