(Adds details, background)
MADRID, June 23 Spain's Banco Popular
has agreed to buy Citi's retail banking and credit card
business in Spain, a sign that foreign banks are retreating from
the country's financial services market in the wake of the
Popular, Spain's fifth biggest bank by market value, said on
Monday it would take on about 950 employees and 45 branches from
Citi as part of the deal, as well as 2 billion euros ($2.7
billion) worth of deposits and 1.1 million credit cards.
Spain has become increasingly tough for foreign banks as a
prolonged economic slump and a property crash sparked a wave of
mergers among local banks.
The economy is emerging from recession, but both domestic
and foreign banks are struggling to revitalise profits, as loan
defaults remain close to all time highs.
Still, some banks such as Popular, are capitalising on the
pull-back by international rivals to expand their business.
Britain's Barclays is also sounding out buyers for
its Spanish retail bank while retaining an investment banking
team in the country, sources have previously told Reuters.
Lenders such as Caixabank MC> have said they would be
Citi said in a statement it would remain in Spain but focus
on expanding its private bank and advising Spanish companies and
public sector clients through its investment bank.
Popular, which did not detail how much it would pay for the
Citi acquisition, said the purchase would close after it
received regulatory approvals, likely to be in the third quarter
of this year. ($1 = 0.7357 Euros)
(Reporting by Sarah White, Editing by Fiona Ortiz and Jane