Citibank poised to acquire Mellon's credit-card business

Citibank, the world's credit-card leader, took another step in a campaign to strengthen its core consumer lending business by agreeing to acquire Mellon Bank Corp's credit-card business for an undisclosed price. Citibank, the largest financial services provider in the United States, said it expected to conclude the deal by March 31. The purchase involves 800,000 accounts and US$1.9 billion in receivables and will give Citibank about 70 million credit cards in circulation in the US and 96 million worldwide. Pittsburgh-based Mellon, the 18th-largest US banking company, said in January that it planned to shed its credit-card business, as well as its mortgage and network services transaction-processing divisions.

It would focus on businesses with the highest growth and potential for return to shareholders. The deal will allow New York-based Citibank to market credit cards under the Mellon and Dreyfus brands. The deal is CitiGroup's third recent acquisition. Commercial Credit, Citigroup's personal and home-loan business, bought 128 branch offices from Associates First Capital. The company also bought Financiero Atlas, a Chilean consumer-finance company.