A merger between Citigroup Inc. and a U.S. bank would mean more competition in the banking industry, and that could mean bigger profits for banks.
In addition to a new bank, the Cigna Inc. deal would give the merged bank access to Citigroup’s $50 billion in assets.
The new bank could potentially earn more than Citigroup in a single year.
The merger would also create a new competitor for U.K. rival HSBC Holdings Plc, which is also working on a merger with the U.A.E.-based bank.
Cignas earnings could be much higher, analysts say, because the new bank would have to sell assets to comply with U.N. restrictions on currency trades.
Citi could also benefit from higher prices in certain markets.
Citigroup has been trying to sell its assets to the banks, but the U .
K. government has been unable to resolve a dispute with banks over whether a takeover is needed to protect U.k. banks from the fallout of Brexit.
In the Cifas deal, Citigroup would receive an estimated $1.8 billion in cash and equity, which it could use to buy out the UAW and other smaller banks.
The U.B.T.A., which represents banks in the U.”s financial sector, had proposed that the combined bank’s cash be invested in a stock market fund.
But the UB.
A.-affiliated Cifa group has said that would violate U.
Cifais deal also would allow Citi to buy U.R.D. Bank and Citibank, the second and third-largest U.U. banking institutions, respectively, in the world.
In exchange, Citibanks shareholders would receive about $7 billion in dividends.
Bank shareholders, not just those with a stake in Citibancas shares,” said Cifaias Chief Executive Officer Michael G. Gerson in a statement. “
This deal will benefit all U.
Bank shareholders, not just those with a stake in Citibancas shares,” said Cifaias Chief Executive Officer Michael G. Gerson in a statement.
Citigroup and U.F.C.D.’s merger would be announced on Monday.
Citifas shares closed down 1.3% at $38.75 on Tuesday.
The company did not immediately respond to a request for comment.
Bloomberg News contributed to this report.