Citigroup said it agreed to buy American Express’ stockpile of U.S. credit card loans made to shoppers of Costco Wholesale, as the fourth-largest U.S. bank takes over a card partnership with the retailer. Terms were not disclosed.
The sale was prompted by Costco’s move last year to switch its credit card partnership to Citigroup and Visa, ending a 16-year relationship with Amex. Investors have waited ever since to see what premium Citigroup would pay for the loans, Amex’s biggest portfolio of debt from a co-brand deal, in order to start the partnership this year. Amex said in January it expected a gain of approximately $1 billion from a sale.