Citigroup is soliciting potential buyers for its subprime lending unit CitiFinancial, the Financial Times reported Friday, citing sources it did not identify.

The bank, the nation's fourth largest in terms of GSE/FHA servicing, is supposedly in the early stages of talks with possible bidders, including private equity firms and other finance companies.

However, according to industry officials in the U.S., Citi no longer originates subprime mortgages here and hasn't in any significant way for at least two years. Moreover, it has a large subprime servicing portfolio, whose size it has declined to reveal.

At last check, Citigroup controlled at least $30 billion in subprime residential servicing rights, according to figures compiled by National Mortgage News and the Quarterly Data Report. Last decade it made two huge subprime purchases that later proved costly: Associates First Capital Corp., Irving, Texas, and Commercial Credit Corp. of Baltimore. (Both were cited for abusive lending practices.)

CitiFinancial is part of Citi Holdings, a collection of businesses that the company has been trying to sell for the last two years. This past summer Citigroup CEO Vikram Pandit said he was in no hurry to sell CitiFinancial, and that he did not intend to shut it down, as Wells Fargo had just done to a similar unit.

"As a matter of fact, it is a business that we continue to like," Pandit said then, "and while it may or may not fit — and as we said, it may not fit — in our ongoing strategy, it's certainly extremely valuable to somebody, and we are not inclined to do anything unless we find somebody else who sees the value."

A Citi spokeswoman declined to comment Friday morning. Last year CitiFinancial closed more than 300 U.S. branches and stopped making new loans at more than 180 other locations to prepare for a sale.

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