Blackstone and other private-equity firms have reportedly held informal talks about buying CitiFinancial Auto, the nonprime auto unit of Citigroup.
Potential buyers are looking to buy the $16 billion loan portfolio at a steep discount, according to a report in today’s New York Post. CitiFinancial Auto originates mainly indirect loans via 6,000 dealers nationwide. Its portfolio has shrunk from $21 billion in early 2008.
Speculation surfaced in December 2007 that Citigroup and HSBC were seeking buyers for their auto loan operations, as turmoil in the credit markets forced many large investment banks to reevaluate their holdings business-wide. Last week HSBC sold its auto loan servicing business and $1 billion of receivables to Santander Consumer USA for $904 million.