Pioneering Savings Bank to be bought by Citigroup, says FT
BYLINE: Andrew MATHEWSThe FT has revealed that Pioneering savings bank has been purchased by Citicorp.
The deal has been agreed by the two banks, who will share a boardroom and will share headquarters.
The merger was announced by Citin chief executive Michael Kavanagh and Citigroup’s head of strategic development, John Breslin.
Both firms will continue to operate in their current locations.
Pioneering’s chief executive, Robert Lusardi, said he hoped to continue working with Citicors chief executive officer.
Citigroup said it was “pleased to welcome Pioneering and its future leadership to Citigroup”.
Citin CEO Michael Kavannagh and Chief Executive John Bresslin, seen here, will join Pioneering as the banks’ new owners.
The acquisition will create a new global bank group that will have an annual turnover of $1.8 billion.
It will include a headquarters in New York, the first of its kind for Citicorporations.
The group will also be able to raise money from public and private markets.
Citi and Citic will retain the ownership of the Pioneering name and logo.
“We believe Pioneering is a leader in the private sector in the savings, savings vehicle and financial services sector, and we look forward to working together in a manner that will benefit our customers and our industry,” Mr Kavanagh said.
“We are excited to share Pioneering with Citigroup as they continue to make important contributions to the global financial services industry.”
The new company will join the bank group with the other largest US banks including Bank of America, Citigroup and Wells Fargo.
The deal is expected to close by the end of the year.
Pioneers board members include Mr Bresli, who led Citigroup for 18 years before taking over as CEO.
In the UK, the deal will give Citic to Citis stakeholder banks in London, with the existing company having to buy back its stake.
The news comes just days after Citigroup reported a second quarter profit of $14.7 billion, up 7.4 per cent.