One of New York's venerable banking names may be ready to join the ranks of asset-backed security issuers, while another New York banking institution bows out of one area of lending activity.

Dime Bancorp Inc., the state's largest thrift institution, said it has completed the purchase of the automobile finance unit of Citigroup Inc., parent of the nation's largest banking organization. The acquisition is designed to expand Dime's consumer lending business, while providing Citigroup with an exit strategy from the auto lending business. The price was not disclosed.

In the transaction Dime said it acquired about $945 million of loans, mostly in the form of prime-quality auto-loan receivables. Dime also acquired some commercial mortgages and auto-dealer loans in the sale.

Citigroup said it is selling off the auto lending assets in order to "refocus on consumer businesses in which we are the clear category leader."

Dime, meanwhile, sees the purchase as an opportunity to diversify its lending activities, which have been centered primarily in the business and home buyer sectors. When it first revealed its intentions to buy the loan portfolio, Dime officials said it would boost consumer loans to 13% of its total loan portfolio from 8%.

Officials at Dime said securitization might be a likely product of the Citigroup transaction. A spokesman said bank officials "are not ruling anything out." However, he added, "the jury is still out on this matter."

Dime, which has about $21.4 billion of assets, said it expects the purchase to have an immediate positive impact on its earnings. It boasts a network of 100 bank branches in the New York area, and a mortgage subsidiary, North American Mortgage Co. that has not engaged in any significant securitization activities.

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