The decision to keep the credit card business at Citigroup will be fruitful as it has been for its peers. JPMorgan Chase & Co. (NYSE:JPM) , the largest bank by assets in the US, reported fourth-quarter results that reflected strong underlying performance across virtually all its businesses, with strong lending and deposit growth. Dimon, JPM’s CEO noted that the bank continues to see strong credit performance and favorable credit conditions across its credit card portfolio and wholesale loan portfolio, respectively. Credit card sales volumes climbed 9% over the prior year at JPMorgan, and deposits surged 10% over the same time period to $404 billion, up 3% sequentially.
Bank of America Corp (NYSE:BAC), another money center bank in the US reported 7% year over year growth in the number of new credit card accounts during 2012 while is credit card loss rate plunged during the fourth quarter of the prior year to the lowest level since the second quarter of 2006. The bank also reported 7% increase in the purchase volumes per average active credit card accounts during the fourth quarter.
I believe Citigroup’s Best Buy deal is strategically and financially attractive. Besides contributing to the bottom line of Citigroup, the deal is expected to help the bank realize some deferred tax benefits.
The article Is Citi’s Best Buy Deal Worth It originally appeared on Fool.com and is written by Adnan Khan.
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