With Associates, Citi Extends Retail Power in U.S., Abroad American Banker (09/07/00) Vol. 104, No. 34 p.1; Julavits, Robert; Stock, Helen
Citigroup's acquisition of Associates First Capital
will give Citi new ways to cross-sell insurance and other
products. Associates First has over 2,600 branches and 27
million customers in the United States and 12 other nations.
These branches can become portals for Citigroup's financial
products. The deal will also make Citigroup the biggest
originator of home equity loans and give it a lead in credit card
receivables. Citigroup executives note that the company's $77
billion or so in overseas deposits can be used in lending in
international markets through Associates First. S&P Equity
Research analyst Stephen Biggar says that more cross-selling will
probably occur with the new customer set brought by Associates
First. Associates Home Equity/Associates Financial Services was
the third-biggest U.S. originator of subprime loans in 1999.
Associates First's structure will probably be taken apart and its
individual business lines blended into existing Citigroup units,
with some reductions. A.G. Edwards & Sons financial services
analyst Diana Yates says that Citigroup may find that it does not
want all of Associates First's businesses.