Citigroup has taken a further step in chief executive Vikram Pandit’s plan to divest the vast US financial services group’s non-core assets by striking a deal to sell its benefits servicing joint venture to Dutch bank ING.

Citigroup, which has equal ownership along with State Street Corp of the CitiStreet unit, said in a statement today the two companies have agreed to sell the business to ING for $900m (€579m) in cash, with the deal closing by the end of the third quarter this year.