SMBC to buy Citi Japan retail business in October

December 24
6:30 AM 2014

Sumitomo Mitsui Banking Corp (SMBC) will buy Citigroup Inc's (C.N) Japanese retail banking operations in October for about 40 billion yen ($330 million), people with knowledge of the matter said on Wednesday.

The Sumitomo Mitsui Financial Group Inc (8316.T) unit will announce the long-awaited purchase on Thursday, the sources said.

Citi's Japan consumer banking business 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.

Spokesmen for the two banks declined to comment on the deal.

The Citi operations will be merged into SMBC Trust Bank, which will let Citi's retail customers in Japan maintain their access to the U.S. bank's global ATM network for at least two years after SMBC's acquisition, the sources said.

The new business combination will focus on selling Citi-developed financial products, they said.

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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