Citigroup announced earlier this week that it will buy the mortgage arm of Dutch bank ABN AMRO for an undisclosed fee.
Citigroup will acquire ABN AMRO’s nearly $224 billion mortgage-servicing portfolio and $9 billion in net assets.
ABN AMRO Mortgage Group originates (mortgage lender) and services prime residential mortgage loans in the United States, and in recent months has cut costs, increased revenue, and added growth despite poor overall market conditions.
It is believed that their relative strength and position in the U.S. mortgage market along with their recent restructuring led Citigroup to bid for the company.
The addition of ABN AMBRO Mortgage Group will add roughly 1.5 million servicing customers and 2,500 mortgage brokers to CitiMortgage Inc.’s wholesale division.