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  • Citigroup Inc.'s (NYSE:C) Game Plan - Get Rid of Non Core Businesses

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    Monday September 20, 2010 at 09:13 am EST
    Citigroup Inc. (NYSE:C) Sells Its Student Loan Business
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    Citigroup Inc. (NYSE:C) on last Friday quit the U.S. student loan business and sold its student loan unit to Sallie Mae and Discover Financial Services. Citigroup stripped its 80 percent stake in the Student Loan Corporation (SLC). The remaining 20 percent is traded publicly. This resulted in cutting off of nearly $32 billion in student loan assets from Citigroup's possession. Sallie Mae (Reston, Va.), the government-backed student lender and formally known as SLM Corp., will be able to collect payments and service worth $28 billion of federally backed student loans. Discover Financial Services took over $4 billion worth of private loans, which do not carry federal guarantees but results in higher interest rate payments from borrowers.

    U.S. Department of Education will buy the remaining $4.7 billion and Citigroup itself bought back an additional $8.7 billion in federal and private student loans, which will be unwound afterwards. The value of 30$ / share will be received by SLC’s shareholders.Michael Corbat, CEO of Citi Holdings, said in a statement that “We are delighted that Discover will acquire SLC's private student loan business and build on its strong foundation, and we are confident that Sallie Mae will provide high quality service to Federal Family Education Loan Program borrowers after the transition is completed," Citigroup stock closed at $3.95 on Friday near resistance level of $4.01. The support levels below are at $3.88, $3.74 and $3.40. Resistance levels for Citigroup inc. - $4,.11, $4.25 and $4.98.

    Other Major Press releases this month include 1) Citigroup Inc (NYSE:C) being Opportunistic in Asia. 2) Citibank  in early September reduced the minimum deposit required to waive the fees for its Gold checking account

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