Citi Retail Cards Unit Renews Shell Partnership Deal

Citigroup Inc. has renewed its long-running credit card partnership with Shell Oil Products US and is planning a new rewards program for the cobranded Shell MasterCard, even as the bank unit that issues the cards remains up for sale.

The renewal is the latest sign that Citigroup, which has about $45 billion of assets in its retail partner card unit, may retain those portfolios instead of continuing to search for a buyer.

The third-largest U.S. bank by assets put its retail partner card unit up for sale in January 2009, but it has not been able to find a buyer willing to pay the price it wants. Now Citigroup is reportedly considering holding onto those assets and bringing them back into its main operating unit.

"Shell is huge, with a highly recognized brand, and Citi clearly wants to hold onto this relationship to use it as leverage for other deals it might do with other big retailers," Brian Riley, senior director of research at TowerGroup, tells PaymentsSource.

Shell recently stopped taking applications for the card, explaining on its website that it was developing plans with Citi to modify the rewards customers earn with purchases. Applications will be available September 1, when the new rewards program launches, a Shell spokesperson says. The new card, which carries no annual fee, will provide cardholders with a discount of up to 20 cents per gallon on their first 100 gallons.

The two companies last year announced the new private-label Shell "Drive for Five" credit card, which provides cardholders who buy at least 45 gallons of gasoline per month a 5-cent discount per gallon (see related story).

Shell also offers a basic private-label card through Citi and the Shell Select Member private-label card, a spokesperson says.

Citi's other retail credit card-issuing partners include Sears Holdings Corp., The Home Depot Inc. and Macy's Inc.