NEW YORK—The move by Citigroup last summer to acquire Costco's co-branded credit card portfolio from Amex is paying off for the mega-bank.
In its Q4 2016 earnings release, Citi posted 8% overall revenue growth on a constant-currency basis.
“The Costco portfolio appears to be a major driver of Citi's overall growth right now. Costco cards are still driving massive spending. The customer base, which likely totals roughly 12 million, saw over $52 billion in purchase sales in its first six months, and over $6 billion in loan growth, according to the bank’s earnings call,” Business Insider reportex.
To put that performance into context, Amex saw roughly $80 billion in Costco billed business in 2015, which puts Citi's annual run rate roughly $24 billion ahead of the Amex card, noted Business Insider.
Citi's branded cards earned $2.2 billion in revenue in Q4 2016, posting 15% growth year-over-year.
“Without Costco, that growth rate dips to 2%, showing the massive impact that the portfolio acquisition continues to have on Citi's business,” Business Insider stated.