Synchrony Financial Spinoff: Private Label Credit Cards Come Full Circle

Last year, Citigroup Inc (NYSE:C) bought up Capital One Financial Corp. (NYSE:COF)’s $7 billion Best Buy card portfolio for an undisclosed price; though the parties to the transaction said it was struck at book value. The deal was particularly notable for the sea change in Citigroup’s view on private-label credit cards as a business.

In fact, Citigroup Inc (NYSE:C) was in the market to offload its Citi Retail Services, a store branded card business that was a part of its “bad bank” portfolio, as late as 2011. But in a October 2011 volte face,...