American Express Enters Into Agreement to Sell Costco U.S. Cobrand Portfolio

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The FINANCIAL — American Express on February 29 announced that it entered into an agreement to sell its Costco U.S. cobranded card portfolio to Citibank N.A. (Citi).

The sale is expected to close June 2016, at which time all eligible Costco American Express Card cobranded accounts will be transferred to Citi. Additional details will be provided to Card Members in advance of the partnership end date, according to American Express.

The ultimate gain on sale will be determined based on the assets actually sold, and as previously disclosed, American Express estimates a gain of approximately $1 billion. Given that the close is still several months away, and the Card Member borrowing and paydown trends are difficult to predict in this type of transition, the final gain could differ from the estimate.

 

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