NEW YORK/AMSTERDAM (Reuters) - Citigroup (C.N) said on Monday it will buy ABN AMRO Mortgage Group, an originator and servicer of U.S. prime residential mortgage loans that is a unit of LaSalle Bank Corp and ABN AMRO Bank NV AAH.AS.
Citigroup said it will buy about $9 billion in net assets and ABN AMRO’s approximately $224 billion mortgage-servicing portfolio, although terms of the transaction were not disclosed.
ABN said it expected to record a small book gain on the transaction, which is expected to close in the first quarter of 2007.
The Dutch bank added its decision to sell the business was part of its strategy to streamline its activities and to align them around mid-market commercial and consumer clients.
“In a declining market, ABN AMRO Mortgage Group realised increased revenues and profits, reduced its cost base, introduced products that positioned the company for sustainable growth and, most recently, has driven improved market share,” said Joost Kuiper, a member of ABN AMRO’s managing board.
“It is this very turnaround that allowed Citigroup to see the value of the business.”
The acquisition will add about 1.5 million servicing customers to CitiMortgage Inc.’s portfolio, Citigroup said. It also will add 2,500 wholesale brokers to its wholesale lending business.