Citigroup seeks buyers for Brazilian credit card and consumer finance unit

US financial services group Citigroup Inc (NYSE:C) is looking to divest the Credicard consumer finance unit of its Brazilian business as part of a plan to concentrate on its strongest operations, the Valor Economico newspaper said today without citing sources.

According to the report, Citigroup has opened a data room to possible suitors with preliminary information about the unit. Credicard, with some 7m clients, could draw interest from some of Brazil’s biggest players including Banco PanAmericano SA (SAO:BPNM4), part of Banco BTG Pactual SA, Valor said, adding that a price tag had not been determined yet.

A public relations executive for Citigroup refused to comment on market speculation, when contacted by Reuters.

Recently, Valor cited Citigroup’s chief country officer Helio Magalhaes as saying in an interview that the group did not plan to sell Credicard.

Canada’s TD Bank acquires Target’s credit card operation

Canada’s Toronto-Dominion Bank (TSE:TD), or TD Bank, said it has reached a deal to purchase the existing US Visa and private label card portfolio of Target Corp (NYSE:TGT) for an undisclosed amount.

The particular US credit card portfolio has a current gross outstanding balance of USD5.9bn (EUR4.6bn). Its acquisition fits well with TD Bank’s risk profile and strategy and is expected to help the buyer achieve its earnings target of USD1.6bn from the US P&C segment in 2013, group president and CEO Ed Clark stated. He also noted that the agreement will significantly grow TD Bank’s presence in the North American credit card business.

The parties have also agreed to a seven-year programme as part of which TD Bank will act as the exclusive issuer of Target-branded Visa and private label consumer credit cards to the latter’s US clients. Under the terms of this programme deal, the two companies will share the profits generated by the portfolios, but Target will have the more substantial interest.

As part of the transaction, which will be financed with available resources, TD Bank will acquire more than five million active Visa and private label accounts and will fund the receivables for the existing Target Visa and private label accounts in the US. The purchase is pending regulatory clearance and is anticipated to close in the first half of next year.

The Canadian entity estimates that its Tier 1 capital ratio will drop by about 20 basis points on completion, on a pro forma basis as at its last quarter to 31 July 2012. Its common equity Tier 1 ratio is seen to go down by some 14 basis points under Basel III on a fully phased in basis. Furthermore, the acquired portfolio is expected to result in a return on assets of around 100 basis points the first year.

Save money and simplify your life

The notion of ‘more money more problems’ might ring hollow in the ears of the long-suffering financially squeezed. But ask anyone used to seeing large amounts of money come in how stressful it can be, and you might start to appreciate the simplicity of a life without too much economic pressure.

It’s a pressure that’s entirely brought about by the infinite nature of greed. When a person finds themselves with great wealth, they realize their increase in buying power and ramp up their spending to meet it. All the latest gadgets, a car, big house – it all gets snapped up in a shopping binge. Regular monthly outgoings soar in order to maintain all the new property. Then there’s higher income and property tax, not to mention insurance and utility bills.

While their gross income has shot up, many people find their net income is the same, or even worse than before, simply because they have found ways to spend all this extra cash. The pressure to keep up is tremendous.

Rich or not, changing your attitude towards money – and realizing the pleasure it can bring is not inexhaustible – will be a positive move for your personal happiness. A simple life with simple pleasures can result in a lot less stress. See the relentless spinning of financial wheels for what it is – a trap – and you will set store by some of the more important things in life, such as friends and family.

And there are ways to manage your existing financial situation so that you can clear a lot of the worries of being poor without replacing them with the worries of being rich. Look at your credit card debt and see if you can pay it off. Credit card debt is usually expensive, particularly if you’ve been a terminal minimum-payer. If you have lots of cards, do what you can to pay them off. Even taking a loan out can be cheaper than paying off multiple cards. Look for credit cards with rewards from the likes of Santander, which enable you to pay off multiple cards and also reap the benefits.

You can also try saving energy. Utility bills are one of the most ignored outgoings. The amounts often seem manageable on a month-to-month basis. But try an online energy calculator  and see if you can make savings. It’s better for the environment, and could save you quite a bit of money in the long run. Keep your pipes and hot water tank well insulated to make further savings.

Try to get rid of one monthly bill. Make a list of all your expenses. Rank them in order of necessity. You might find you’re happy to do without cable TV and a landline telephone. Over a year, that could save you a few hundred pounds. Do you have a second car? Do you really need a second car?

Frugality is a virtue. Not having unfettered access to a pile of cash (and being aware of what a distraction it can be) will make you reassess your life for the better.

Find the Right Credit Card For You

The credit-card market is full of different offers and attractions to tempt in customers. And while it may seem simplest just to take the first card offered to you by your bank, there are often better offers out there to suit your circumstances, including specialised products to match specific requirements.

Compare What’s Available

Go to Money Supermarket to review the current range of cards available and see what the deals are. You can filter the best buys using different criteria, such as lowest interest rate, special offers and other factors that may be of interest to you. One thing you’ll notice is that some cards are designed for specific purposes.

Cashback Cards

These are ideal for people who pay off their balance in full every month and never accrue interest. Basically, every time you spend on one of these cards you receive a small amount of cash back on that purchase. It can be anything from 0.25% to 3% for a limited period.

Just check the terms and conditions carefully. Some cashback cards will offer the cash back at a lower percentage for the duration of the card’s use, while others will offer higher rates but for shorter promotional periods.

If you’re likely to buy a lot over a short period (and pay the balance off in full), such as in the run up to Christmas, during a holiday or to do up a house you’re moving into, the higher rate for the shorter timeframe may be ideal for you. Check if there are any maximum cashback limits and then compare the best cashback cards across the market.

Balance-Transfer Cards

These cards are for people who already have a credit balance and who are paying high amounts of interest on it. These balances may be held across a number of cards at different interest rates. The balance-transfer card allows you to switch all your existing balances on to one single card, making it easier to manage.

The interest rate may then be 0% for a promotional period of up to a year or even more in some cases, or it may be a low-rate ‘life of balance’ card which allows you to pay off the balance in stages, with interest accruing at a manageable rate. Just be very careful not to buy additional things with this card, as the promotional rate won’t apply to new spending.

Reward Cards

These are often affiliated to supermarkets with points schemes, airlines with frequent-flyer miles or other benefits that you can accrue simply by doing your spending on that credit card. These are useful if you’ll use the benefits but check that the underlying offer is genuinely competitive.

Charity Cards

These cards offer a small percentage of your spending as a donation to the sponsored charity. Check the small print very carefully, though and work out whether it’s the right way to donate for you or whether you’d be better using a low interest rate regular card and donating your money personally. Always work out the underlying costs and charges.