Citigroup Plans I.P.O. for Its Subprime Lending Unit, OneMain Financial

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Citigroup has said that OneMain Financial no longer fits with its strategy of catering to more affluent consumers.Credit Mario Tama/Getty Images

In a long-awaited move, Citigroup’s lending unit, OneMain Financial, is preparing for a $50 million initial public offering.

The spinoff of OneMain, which makes personal loans often to consumers with damaged credit, comes five years after Citigroup first signaled that it intended to jettison the business. The bank has said OneMain no longer fits with its strategy of catering to more affluent consumers, but previous attempts to sell the business have fallen through.

Citigroup is the sole bookrunner on the I.P.O., OneMain disclosed in a regulatory filing on Wednesday.

Citigroup is also pursuing an outright sale of the lender, which has an extensive branch network in 43 states, people briefed on the matter say. It’s not clear when an I.P.O. might occur, though the people said it could take place by the end of the year. The $50 million is a placeholder amount and is likely to change closer to the offering date.

OneMain is looking to capitalize on the subprime lending market in the United States that many large banks fled after the financial crisis. OneMain’s loans, which carry interest of up to 36 percent, are often used by borrowers to pay for medical bills and auto repairs.

Since Springleaf Holdings, the former consumer lending unit of American International Group, went public last fall, its shares have increased nearly 70 percent.