Citigroup subprime unit files for $50M IPO
NEW YORK (AP) — Citigroup's subprime lending unit, OneMain Financial Holdings, on Wednesday filed for an IPO valued at $50 million.
OneMain did not say how many shares it plans to sell in the initial public offering nor did it say when the IPO will take place. The amount of money being raised can also change before the IPO takes place.
As of June 30, the Baltimore company had 1,141 branches and 1.3 million customer accounts in in 43 states. It also had $8.2 billion in loans outstanding.
OneMain said a "substantial majority" of its customers are subprime or non-prime borrowers, which means they have weaker credit and represent bigger risks of low collection rates or higher losses than consumers with better credit.
The company reported a profit of $536 million on $2.02 billion in revenue in 2013. It was previously known as CitiFinancial, and Citigroup has publicly discussed selling the company since 2009.
OneMain Financial Holdings Inc. said its stock will be listed on the New York Stock Exchange.
In July, Citigroup Inc. agreed to pay $7 billion to settle a federal investigation into its handling of risky subprime mortgages. Citigroup and other banks minimized the risks of subprime mortgages when packaging and selling them to mutual funds, investment trusts and pensions, as well as other banks and investors.