Citigroup is selling its consumer finance units to Brazil’s Banco Itaú Unibanco for R$2.77 billion (around $1.37 billion), subject to regulatory approval.

The deal includes the Credicard business, a non-banking consumer finance and credit card unit, along with Banco Citicard and Citifinancial, which principally distribute products under the Credicard brand.

This includes 96 stores and a credit portfolio worth R$7.3 billion (as of December 31, 2012) and with a credit card base of 4.8 million.

Citi said it expected an after-tax gain of around $300 million after closing from the deal.

The transaction does not include corporate cards, the Citi and Diners branded portfolios, the Credicard Platinum portfolio (except for Exclusive), or Credicard American Airlines cards, which will all be migrated to the Citi brand and managed by the banking group.

The sale comes as Citigroup is withdrawing from the mainstream Brazilian credit card market and focusing on high-income customers and corporate and investment banking in the country, the Financial Times reported.

"Brazil is a very important growth market and is an essential part of Citi's Latin American footprint and global network. This transaction demonstrates how we are finding ways to optimize our businesses and focus on specific segments in the emerging markets, consistent with our global strategy," said Francisco Aristeguieta, chief executive of Citi Latin America.

Last year the US bank overhauled its executive management team in Latin America, separating it into five geographic markets under regional leaders, as part of its growth strategy there.

For Itaú, meanwhile, the acquisition sees it purchase a business it helped build, and in which it was a partner until 2006, the FT report says, giving it an even larger share of the country's credit card market.

Brazil is not just the biggest economy in Latin America, it also has the highest number of high net worth individuals in the region, with around 227,000 millionaires among its population, according to Credit Suisse's Global Wealth Report 2012. The lion’s share of local assets are managed by domestic players like Banco do Brasil, Itau Unibanco and Bradesco, according to research from Strategic Insight.