FRANKFURT, Germany -- Citigroup will sell its German retail banking operation to France's Credit Mutuel for $7.7 billion in cash.
In a statement released Friday, Citigroup c said the deal includes its Duesseldorf-based Citibank Privatkunden AG & Co. KGaA, along with some affiliates. The sale is expected to close in the fourth quarter if approved by regulators.
Citibank Germany earned $573.3 million in 2007 and had net assets of $1.5 billion. Citigroup said the deal would result in a post-tax gain of $4 billion.
Credit Mutuel said the deal "affirms its European development strategy, particularly in retail banking, insurance and international financial services."
The acquisition broadens an expansion in the past decade into Belgium, Luxembourg and Switzerland.
Cooperatively owned, Credit Mutuel is France's second largest retail bank with nearly 15 million customers and more than 5,000 branches, according to the bank's website.
In 2007, it earned $4.3 billion on sales of $16.6 billion. It also owns France's CIC corporate and investment bank.
Citibank has reported consecutive quarterly losses from huge missteps in the mortgage market.
Citigroup has announced 13,200 job cuts since the credit crisis began slamming the banking industry last summer, with $14 billion in value lopped from its investments during the first quarter alone.
"This is another strategic step in our effort to reorganize Citi, strengthen our balance sheet, and put us squarely on the path to future growth driven by our core businesses," Chief Executive Vikram Pandit said in a statement. "In Germany, our talented corporate and investment banking teams remain central to our strategy and we're committed to maintaining their leadership position in this market."
The bank added that it remained "strongly committed to its remaining German businesses, including its full service corporate and investment banking business and its European data center, which is the biggest Citi data center outside the United States."