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Tue, Jan 20, 2009 - Page 10 News List

Citigroup stresses commitment to Japanese units

AFP , TOKYO

Citigroup said yesterday it was “committed” to its Japanese brokerage and asset management businesses, following reports they are up for sale as the troubled US financial giant splits in two.

“With respect to our brokerage and asset management businesses in Japan ... Citi remains committed to maximizing the companies’ value over the next few years,” the group said in a statement.

Media reports said the group was looking to sell either one or both — Nikko Cordial Securities and Nikko Asset Management — as it offloads non-core assets in an effort to return to profitability.

The Wall Street Journal reported, citing unnamed sources, that Citigroup decided to sell off Nikko Cordial after management agreed that the brokerage arm did not fit into the group’s plans.

Citigroup said on Friday that it would split into two businesses as it reported a US$8.29 billion loss in the fourth quarter.

The US group last week identified the two Japanese units as non-core assets that “do not sufficiently enhance the capabilities of Citi’s core business, and in many ways compete for its resources.”

A Japanese newspaper reported last week that Japan’s largest financial group Mitsubishi UFJ Financial Group was looking at buying the two units.

Nikko Cordial Securities was not included in a deal announced last week between Citigroup and Morgan Stanley to merge their worldwide brokerage operations, a deal giving Citi US$2.7 billion in much-needed cash.

Citigroup took a controlling stake in Nikko Cordial in 2007 as its partner reeled from a fraud scandal. It acquired full ownership of the firm last year.

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