OneWest Cuts $1.4B Deal With Citi Holdings

By Dees Stribling, Contributing Editor

OneWest Bank FSB has purchased a $1.4 billion multifamily and commercial real estate loan portfolio from Citibank NA’s Citi Holdings division. According to the buyer, the 600-loan portfolio is a “strategic addition” to its CRE lending business.

“This  portfolio purchase represents our ongoing commitment to commercial real estate lending,” OneWest president and CEO Joseph Otting noted in a statement. The transaction closes immediately, and while terms of the transaction were not disclosed by either party–including the portion of the portfolio that’s multifamily–presumably OneWest Bank picked up the assets at a considerable discount.

It is part of Citibank’s long-term strategy as well. Upon completion of this and other previously-announced transactions, said the bank, the total assets in Citi Holdings will represent less than 20 percent of Citi’s balance sheet.

Citi Holdings was created last year expressly to get rid of distressed assets, and the sale to OneWest isn’t the first unloading of them. In August, the division sold about $3.5 billion in nominal worth of CRE loans to J.P. Morgan Chase & Co.

OneWest is the successor entity to IndyMac Bancorp, which failed in 2008 and was taken over at that time by the Federal Deposit Insurance Corp. In early 2009, the FDIC sold IndyMac to a holding company controlled by MB Management Holdings L.P. for about $13.9 billion. Investors in the bank included former Goldman Sachs banker J. Christopher Flowers, George Soros and Michael Dell. Currently, OneWest has total assets of about $27 billion, with 82 branches in southern California.