QUINCY, Mass. — CitiStreet, the record-keeping and administrative services firm co-owned by Citigroup Inc. and State Street Corp., is for sale, and Bank of America is the most likely buyer, multiple sources told Pensions & Investments.
Executives at Citigroup, New York, and State Street, Boston, hope to get at least $500 million for the business in which they own equal stakes, sources said.
Bank of America “does not have a record-keeping arm, and this business might fit nicely for them,” one source said. BofA executives “want to be a player in this market,” and they want to grow the business quickly, the source said.
Bill Carey, managing director of business retirement solutions at Bank of America, declined to comment. John Yiannacopoulos, spokesman for BofA, also declined to comment.
Analysts say that considering New York-based Citigroup's recent subprime-mortgage troubles, executives there clearly are looking for cash to repair the financial services company's ailing balance sheet.
State Street executives are not interested in buying Citigroup's stake in the business because they want to focus on investments, not administration, sources said.
Citigroup spokesman Michael Hanretta and CitiStreet spokesman Michael Bezdek declined to comment. Calls to officials at State Street were referred to CitiStreet.
Sources said investment bankers from Goldman Sachs & Co., New York, and Citigroup have been hired to find a buyer for CitiStreet. A Goldman spokesman declined to comment, as did Citigroup's Mr. Hanretta.
Richard X. Bove, an analyst for Punk, Ziegel & Co., New York, said a sale of CitiStreet would be in line with Citigroup's actions over recent years.
“Citi has been selling assets for years. They sold their money management division, an insurance business and a number of businesses that it had a minority interest in. They have sold more assets than any other bank in the U.S. for some time,” said Mr. Bove.
In a huge deal, Citigroup in 2005 swapped its money management arm for Baltimore-based Legg Mason Inc.'s brokerage arm.
Just last year, CitiStreet sold CitiStreet Associates, a division that distributes annuities and retirement plans to not-for-profit markets, to MetLife Inc., New York. CitiStreet continued to be the record keeper for the CitiStreet Associates business that moved to MetLife Resources.