This article was originally published on TipRanks.com
Financial services and banking major Citigroup Inc. (NYSE:C) recently announced that it has entered into a sale agreement with an independent wealth management firm, Insigneo. The financial terms of the deal have been kept under wraps.
Following the news, shares of the company rose 1.4% to close at $61.18 in Thursday’s extended trading session.
Details of the Transaction
Under the terms of the agreement, Citi will sell its Puerto Rico-based Citi International Financial Services, LLC (CIFS) and Uruguay-based investment advisory firm Citi Asesores de Inversion Uruguay S.A. (Citi Asesores) to Insigneo.
However, this sale agreement is only for the wealth clients of Citi, who will now move to Insigneo. The deposit business will continue as earlier.
The Head of U.S. International Personal Bank at Citi, Scott Schroeder, said, “This sale allows us to simplify our wealth business. At the same time, we saw an opportunity to continue to provide our clients with best-in-class retail banking while they seamlessly continue to work locally with their investment professionals, who upon close will move to Insigneo, which offers a broad spectrum of investment products and wealth management capabilities.”
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Recently, Odeon Capital Group analyst Richard Bove upgraded the stock to Buy from Hold with a price target of $69.25, which implies upside potential of 13.4% from current levels.
The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 7 Buys and 4 Holds. The average Citi price target of $79.43 implies that the stock has upside potential of 30.1% from current levels. Shares have gained about 1.7% over the past year.
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