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Mon, Dec 01, 2008 - Page 10 News List

Citigroup to sell trust banking unit in Japan

AFP , TOKYO

US banking giant Citigroup, beset by global financial turmoil, has decided to sell its Japanese trust banking unit NikkoCiti Trust and Banking, news reports said yesterday.

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 Nikkei Shimbun 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 (US$190 million) as of the end of September. The reports came after the US government late last month stepped in to guarantee more than US$300 billion in potential losses at Citigroup and pump US$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 US$4.8 billion 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.

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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