Citigroup seeking to sell Diners Club business in Japan with retail unit-sources
Citigroup Inc (C.N) on Friday told bidders for its Japanese retail banking operations that it was looking to sell its profitable Diners Club card business in Japan with the retail unit, sources with knowledge of the matter said.
The U.S. bank has been preparing to sell its Japanese retail unit after having struggled to turn around the business amid weak loan demand and falling interest margins in Japan's banking industry.
On Friday, about 10 banks including Japan's top three lenders Mitsubishi UFJ Financial Group (8306.T), Mizuho Financial Group (8411.T) and Sumitomo Mitsui Financial Group (8316.T) participated in the first round of bidding for the retail business, the sources said.
Resona Holdings Inc (8308.T), Sumitomo Mitsui Trust Holdings Inc (8309.T) and Shinsei Bank Ltd (8303.T) as well as some regional banks also submitted preliminary bids, said the sources, declining to be identified as the bidding was not public.
Citibank and the six Japanese lenders declined to comment.
Citibank's Japanese retail business has drawn interest from suitors hoping to take over its wealthy clientele. It has some 3.6 trillion yen ($33.6 billion) in deposits, of which close to 2 trillion yen is dollar-denominated, and this is seen as attractive for Japanese banks seeking stable procurement of foreign currencies, the sources said.
However, it is effectively losing money, weighed down by labor costs at its 33 branches in Japan. Citibank is therefore also seeking to sell the Japanese credit card business to entice bidders, the sources said.
Citibank does not plan to sell the credit card business on its own, they added.
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