NEW YORK, NY - JPMorgan Chase announced today that it has purchased a $3.5 billion portfolio of multifamily and commercial real estate loans from Citibank. Terms were not disclosed. The portfolio, which includes approximately 3,800 loans that are primarily multifamily real estate loans for properties located in California, New York and Illinois, is a strategic addition to Chase's Commercial Term Lending business. The business, which is part of Chase Commercial Banking, specializes in providing loans for moderately priced apartment buildings in stable markets. About 80% of Commercial Term Lending's existing $36 billion portfolio is multifamily loans.
Source: JPMorgan Chase
"This highly desirable loan portfolio adds strong earning assets in markets we currently serve and valuable relationships that will provide new origination opportunities," said Al Brooks, head of Commercial Term Lending. "The portfolio mirrors Chase Commercial Term Lending's focus on excellent borrowers in stable markets."
The purchased loan portfolio contains only performing loans on properties that have shown strong credit performance.
"We are excited about the opportunity to provide additional credit for multifamily properties in our core markets and broaden our relationship with these new clients," said Todd Maclin, CEO of Chase Commercial Banking. "We know how important rental apartments are to the health of a community."
This transaction will reduce GAAP assets by $3.5 billion in Citi Holdings, Citigroup's portfolio of non-core operating businesses and assets, demonstrating Citi's continued progress in reducing assets in Citi Holdings in an economically rational manner while working to generate long-term profitability and growth from Citicorp, which comprises Citi's core franchise. As of the end of the second quarter, Citi Holdings assets were less than 25% of Citi's total balance sheet. Citi will continue to pursue divestiture opportunities in a manner that creates the most value for shareholders.
The transaction closes immediately, and will be reflected in JPMorgan Chase's third quarter financial statements. The transaction is not expected to have a material impact on Citi's net income.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries. Its Commercial Banking business delivers extensive industry knowledge, local expertise and dedicated service to more than 24,000 clients nationally, including corporations, municipalities, financial institutions and not-for-profit entities with annual revenue generally ranging from $10 million to $2 billion, and over 30,000 real estate investors/owners. Commercial Banking partners with the firm's other businesses to provide comprehensive solutions, including lending, treasury services, investment banking and asset management to meet its clients' domestic and international financial needs.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.