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Capital One to sell $7-billion Best Buy card portfolio to Citigroup

SHANNON STAPLETON/Reuters

Capital One Financial Corp. said it agreed to sell to Citigroup Inc. its $7-billion (U.S.) portfolio of private label and co-branded credit card accounts linked to electronics retailer Best Buy Co. Inc.

Capital One, which is among the largest credit card issuers in the United States, said there would be no significant gain or loss on the transaction. It did not disclose the selling price.

Private label cards are commonly called store cards and can be used only at a single retailer. Co-branded cards can typically be used elsewhere.

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Separately, Citigroup said it would issue and manage Best Buy credit cards in the United States in a deal that would not affect its earnings this year materially.

The transactions are expected to close in the third quarter, Citigroup said.

Citigroup's cards division for stores has come a full circle since the financial crisis. The bank had initially planned to sell the unit but decided to keep it after loss rates on the cards fell.

Citi's retailer cards business now services 90 million accounts for chains such as The Home Depot Inc., Macy's Inc. and Sears Holdings Corp.

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