Citibank Acquires Mellon's Credit Card Business for Growth Opportunity

Strategic Insights -

Citibank, a unit of Citigroup, has signed a marketing agreement with Mellon Bank Corporation, which includes the acquisition of Mellon's credit card business and a portfolio of $1.9 billion in credit card receivables. This strategic move aims to enhance Citibank's consumer business, focusing on core strengths and achieving economies of scale. The acquisition also establishes an agent bank relationship between Citibank and Mellon, enabling Citibank to market credit cards under the Mellon and Dreyfus brands.

Key Takeaways:

  • The acquisition of Mellon's credit card business and $1.9 billion in credit card receivables strengthens Citibank's position as the global leader in consumer credit cards.
  • With this move, Citibank will have approximately 70 million credit cards in circulation in the U.S. and a total of 96 million credit and charge cards worldwide.
  • The agent bank relationship with Mellon will enable Citibank to market credit cards under the Mellon and Dreyfus brands, creating significant new business growth opportunities.
  • The addition of 800,000 new accounts and a further 30 million cardholders globally will provide Citibank with increased economies of scale and enhances its global leadership in the consumer credit card market.
  • The Citibank and Mellon relationship aims to provide customers with high-quality service and advanced credit card products and technology.
  • The acquisition is expected to be completed by the end of the first quarter of 1999, pending necessary regulatory approvals.

Statistics:

  • Citibank will acquire $1.9 billion in credit card receivables from Mellon's credit card business.
  • The acquisition includes 800,000 accounts.
  • Citibank will have approximately 70 million credit cards in circulation in the U.S. upon completion of the acquisition.
  • Citibank's total number of credit and charge cards worldwide will be 96 million.
  • Mellon's credit card portfolio includes approximately $1.9 billion in credit card receivables.

Sources:

  • BUSINESS WIRE, "Related Marketing Agreement with Mellon and Dreyfus Offers Growth Opportunity"
  • Press releases and other information about Mellon Bank Corporation at www.mellon.com on the Internet.