Sumitomo Mitsui to buy Citigroup's Japan retail unit

December 9
10:31 AM 2014

Sumitomo Mitsui Financial Group Inc (8316.T) will announce as soon as next week that it will buy Citigroup Inc's (C.N) Japanese consumer banking business, Bloomberg reported, citing people with knowledge of the matter.

SMFG, Japan's second-biggest bank by market value, will buy the business for about 40 billion yen ($334 million), Bloomberg said.

Reuters reported in November that four banks including SMFG unit Sumitomo Mitsui Banking Corp (SMBC) were expected to participate in the second round of bidding for Citi's unprofitable consumer banking business in Japan.

Citigroup declined to comment. An SMBC spokesman also declined to comment.

Citigroup remains in talks with Sumitomo Mitsui Trust Holdings Inc (8309.T) to sell its Japanese credit-card unit, Bloomberg said on Tuesday.

Citi's Japan consumer banking business, which includes Diners Club credit card, has been hurt by weak loan demand and falling interest margins in a market where the U.S.-based lender has operated for over 100 years.

Shinsei Bank Ltd (8303.T) and Mitsubishi UFJ Financial Group Inc (8306.T) were among the banks that participated in the first round of bidding, in which the highest offer was around 50 billion yen.

The third-largest U.S. bank said in October it was pulling out of consumer banking in 11 markets, including Japan and Egypt, as it looks to cut high costs.

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