Citi sells unit to Credit Mutuel for 4.9b euros

Citigroup Inc, the largest US bank, agreed to sell its German consumer unit to France's Credit Mutuel Group for 4.9 billion euros to shore up capital.

The Paris-based customer-owned bank will pay the amount in cash, plus the equivalent of Citibank Privatkunden AG's 2008 earnings, New York-based Citigroup said in a Business Wire statement on Friday. Credit Mutuel, France's second-largest bank by branches, is the market leader for consumer loans in Germany with 340 branches and about 3.2 million clients.

Citigroup, reeling from losses on subprime-infected assets, is selling the unit as CEO Vikram Pandit disposes of $400 billion worth of assets. Credit Mutuel beat out Deutsche Bank AG, Germany's biggest bank. The sale of Citibank may be the first in a wave of takeovers in Germany because Deutsche Postbank AG, Germany's biggest consumer bank by clients, and Allianz SE's Dresdner Bank are also up for sale.