Dutch bank ABN Amro is poised to sell its US mortgage business to Citigroup and reinvest the proceeds in North American acquisitions.

US banking sources said the purchase by Citigroup of ABN Amro's $224bn (€168bn) mortgage portfolio, the eighth biggest in the US, is imminent. Citigroup is understood to have won the race to buy the business following an auction run by Lehman Brothers. Citigroup and ABN Amro declined to comment. The sale is part of a broader plan by ABN Amro to divest non-core assets so it can improve use of capital. It recently sold its futures business and is seeking an exit from primary dealing in the US. In April, it sold its US fund operations to asset management firm Highbury Financial. One ABN Amro insider said the bank will look for small to medium-sized acquisitions in the US. He said: "ABN can't fix its mortgage business so it's better to get out and look at other opportunities. It is considering buying other mortgage and retail businesses." The bank has a big US presence through LaSalle Bank. The deal provides further evidence Citigroup is back on the acquisition trail. Last week, it bought London-based wealth management firm Quilter from Morgan Stanley. Charles Prince, chief executive of Citigroup, said at the bank's third-quarter results that it would make medium-sized international acquisitions but ruled out large deals.