The deal has not been confirmed by sources at the bank, although an unnamed spokesman has been cited as saying that Citigroup were negotiating "very aggressively" with BOOC.
The purchase of BOOC would fit in with Citigroup's chief executive Charles Prince's stated strategy of investing more in overseas territories to decrease the US banking giant's reliance on the American market.
Figures for 2006 showed that 20 per cent of Citigroup's profits are from Asia, compared with 41 per cent for HSBC.
Commenting on the developments, Chris Hunt of Macquarie Research said: "The underlying assets of the Bank of Overseas Chinese are really not attractive.
"It's not what Citigroup is necessarily paying for. What they're looking for is a footprint, and that footprint is provided by the branch network of Bank of Overseas Chinese.''
The New York-based bank's expansion in Asia has been heralded by a takeover of Hsinchu International Bank of Taiwan in November and a buyout bid issued this week for Japanese brokerage Nikko Cordial.
