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Citigroup, Merrill Lynch Buy Banks

Both Citibank and Merrill Lynch yesterday announced acquisitions of banks. Citibank bought the London-based Internet bank, Egg Banking, from Prudential PLC. Merrill Lynch bought San Francisco-based wealth manager First Republic Bank for $1.8 billion in cash and stock.

Merrill's buy, its first full acquisition in a decade, gives it access to First Republic assets of $10.7 billion and expands its ability to offer banking services to high-net-worth individuals.

Citigroup will pay some $1.13 billion in cash for Egg, which has 3 million customers in the U.K. and offers products that include online payment services, credit cards, personal loans, savings accounts, mortgages, insurance, and investments. (Prudential PLC is not affiliated with Prudential Financial Inc. of Newark, N.J.)

Both Citibank and Merrill expect to finalize the deals by the end of the first quarter.

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