Citigroup to sell unit in Japan

November 30, 2008
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, TOKYO, November 30 – US banking giant Citigroup, beset by the global financial turmoil, has decided to sell its Japanese trust banking unit NikkoCiti Trust and Banking, reports said Sunday.

The bidding will likely take place next week, with major domestic trust banks – including Mitsubishi UFJ Trust and Banking and Sumitomo Trust & Banking – expected to make bids for the firm, the business daily Nikkei and Kyodo News reported, citing unnamed sources.

Kyodo News reported that the sale could amount to "tens of billions" of yen. Nikkociti\’s total net assets stood at 18 billion yen (190 million dollars) as of the end of September.

The reports came after the US government in late November stepped in to guarantee over 300 billion dollars in potential losses at Citigroup and pump 20 billion more into the financial giant.

Nikko Cordial Securities, a major Japanese securities house also under the umbrella of Citigroup, has also decided to trim jobs through calls for early retirements, the reports said.

Despite the subprime housing loan crisis which emerged earlier this year, Citigroup has pressed ahead with expansion into the Japanese market, this year taking full control of brokerage house Nikko Cordial Corp. in a 4.8 billion-dollar share swap.

But in February it announced it was selling its Tokyo headquarters to its rival Morgan Stanley in a deal reported to be worth 48 billion yen (455 million dollars).

In June it said it was closing down its remaining consumer lending outlets in Japan in part of its restructuring efforts.

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