Citigroup Inc. (C) said it sold $1.6 billion of credit-card assets to General Electric Co. (GE) as the banking giant continues to shed businesses and loans that don't fit with its new strategy.

Terms of the GE deal weren't disclosed, but the impact is likely to be immaterial to Citi's results. Citi Holdings, the bank's division in charge of disposing unwanted loans, securities, and businesses, held about $465 billion in assets as of June 30, including CitiFinancial North America, the big consumer finance business. The division held $582 billion in the second quarter of 2009, when Citi started formally to sell or wind down assets that weren't core to banking strategy. On June 30, Citi Holdings made up about 24% of Citigroup.

Winding down Citi Holdings is a massive effort. Citi Holdings Chief Executive Michael Corbat has said repeatedly the bank would not sell assets at fire-sale prices, though the bank has sold assets at liquidation value.

The portfolio of card loans being sold is for cards that weren't issued under Citi's own brand. Delinquencies for such "retail partner" credit card loans are slightly higher than for CitiCard loans, but both portfolios are improving, making sales easier for Citi.

Citi's retail credit-card business manages about $50 billion in loans for retail partners including Home Depot Inc. (HD) and Exxon Mobil Corp. (XOM).

Bill Johnson, CEO of Retail Partner Cards, said in a press release that selling unwanted loans will leave Citi "better positioned for future growth as we continue to partner with premier brand retailers."

Other Citi Holdings disposals include last month's announcement Citi would sell its 80% stake in Student Loan Corp. (STU) to Discover Financial Services (DFS) as part of a $600 million transaction. In August, Citi said it sold $3.5 billion in commercial real estate loans to J.P. Morgan Chase & Co. (JPM). Citi has spun off Primerica Inc. (PRI), sold Japanese securities business Nikko Cordial, and exited from various retail and consumer finance businesses in Europe.

By June 30, the division's assets were down 20% since the second quarter of 2009, when Citi started to formally dismantle what it considers assets that are a distraction from its core banking strategy.

Citi shares were roughly flat, at $4.13, in mid-morning trading.

-By Matthias Rieker and Kevin Kingsbury, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com
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