Citi (C) Sells Small Business Loan Platform Bridge to Foro
Citigroup Inc. C announced the sale of its Bridge built by Citi platform to Foro Holdings, Inc., a Charlotte-based commercial lending services provider. Moreover, the bank has joined Foro’s investors, including TTV Capital, US Bank and Correlation Ventures to provide Foro with additional capital investment to aid continued growth of the business.
Bridge is a lending platform that connects small and medium-sized businesses (SMBs) with small regional banks. The platform facilitates small businesses to submit loan proposals to 75 banks and has handled more than $1 billion in loan requests.
Foro will use the new capital investment to scale the business and expand services provided to SMBs, local and regional banks, community banks, non-traditional lenders, and Community Development Financial Institutions.
Citigroup will be a minority investor in Foro and support the platform in numerous ways, including ongoing connectivity with Citi’s Diverse Financial Institutions Group.
Per management, "We developed Bridge to simplify and modernize the lending process for both borrowers and lenders. Our goal is to democratize access to capital for SMBs by providing a digital tool to connect with a range of lenders, while offering lenders a more efficient prospecting process and a way to expand their reach without having to build their own infrastructure.” Hence, the sale of Bridge to Foro will enable the platform to expand and offer innovative solutions to the lending market.
The move comes as smaller U.S. banks are struggling with a decline in lending activity and higher interest rates. Notably, demand for commercial and industrial loans has fallen steadily since the regional bank crisis due to the high interest rates and an uncertain environment. Hence, by connecting small banks and potential borrowers, the platform is a boon for small banks and has an appeal in the current scenario.
The sale is in line with the company’s strategy to focus on businesses like cash management, payment processing and hedging for corporate clients instead of lending book growth.
Notably, setting foot into Latin America's fintech space last month, Citigroupmade a strategic investment in Rextie, Peru’s leading fintech for foreign exchange platform. The investment was executed by the company’s Institutional Strategic Investments arm, which focuses on investing in cutting-edge fintech businesses around the world that are strategically aligned to C's institutional businesses.
Over the past six months, shares of Citigroup have declined 12.1% against the industry’s rise of 0.1%.
Image Source: Zacks Investment Research
Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Divestitures by Other Finance Firms
In an SEC filing, CURO Group Holdings Corp. CURO revealed that on Aug 31, its wholly-owned subsidiary, CURO Intermediate Holdings, completed the sale of all the issued and outstanding equity interests of its Canadian point-of-sale business, FLX Holding Corp., to Questrade Financial Group Inc.
At closing, nearly C$39 million of net proceeds (inclusive of adjustments for escrow and holdbacks) were received after the deal and transaction costs. Per the terms of the deal, CURO expects to receive C$25-C$30 million in late 2023 and up to C$4 million in subsequent periods, subject to adjustments.
Standard Chartered PLC SCBFF announced that it entered definitive agreements to sell its global aviation finance leasing business to Aircraft Leasing Company (AviLease), owned by Saudi Arabia's Public Investment Fund. The news came after Standard Chartered announced in January 2023 that it was exploring options for the future ownership of its global aviation finance business.
AviLease provides leasing, trading and asset management services and aims to expand rapidly to become one of the top 10 leasing companies in the world as part of its business strategy.
Standard Chartered is expected to enhance its capital position through the sale, providing scope to continue focusing efforts on areas where it is most differentiated.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Citigroup Inc. (C) : Free Stock Analysis Report
Standard Chartered PLC (SCBFF) : Free Stock Analysis Report
CURO Group Holdings Corp. (CURO) : Free Stock Analysis Report
