Partnerships / Acquisitions

Citigroup Pockets $150M From Selling Hilton Hotel Card Deal To Amex

Citigroup Earnings Reflect Mobile Efforts

Citigroup announced that it expects to record a $150 million pretax gain on the sale to American Express of a $1.2 billion credit card portfolio, as part of its co-brand deal with Hilton hotels.

According to a Reuters news report, the disclosure was made in a quarterly filing by Citigroup.

The announcement comes after it was revealed in June that American Express would be taking over the issuing of all Hilton co-branded cards. The deal, which is set to start on Jan. 1, comes after American Express lost the bidding war for Costco Wholesale’s credit card portfolio to Citigroup. Amex also wasn’t able to secure a renewal of its partnership with JetBlue Airways in 2015.

In addition, a recent report found that while the American Express credit card once signaled affluence and success, millennials prefer the less assuming Chase Sapphire Reserve card over the superior impression associated with the Amex card.

“This announcement is clearly positive for American Express, as this breaks a string of defections,” Sanjay Sakhrani, a KBW analyst, said in a note to clients, as covered by the report. “It also potentially signals a peak in the competitive intensity of these deals.”

Citigroup has said the terms of the Hilton deal didn’t make sense from an economic perspective, since it is a relatively small portfolio. The sale is expected to close in the first quarter and the gain “approximates one year of revenues from the portfolio.”

——————————–

Latest Insights: 

With an estimated 64 million connected cars on the road by year’s end, QSRs are scrambling to win consumer drive-time dollars via in-dash ordering capabilities, while automakers like Tesla are developing new retail-centric charging stations. The PYMNTS Commerce Connected Playbook explores how the connected car is putting $230 billion worth of connected car spend into overdrive.

TRENDING RIGHT NOW

To Top