Citi (NYSE:C) today announced that it has reached a definitive agreement to sell its retail banking business in Japan to Sumitomo Mitsui Banking Corporation (hereafter SMBC). The entire retail banking operations of Citibank Japan Ltd., including its Japan-wide network of retail branches and ATMs, will be transferred to a trust bank subsidiary of SMBC as part of the transaction, together with approximately 1,600 Citi Japan employees, about 740,000 customer accounts and approximately JPY2.5 trillion (US$21.0 billion at an exchange rate of 118.15 yen to US$1.00) of yen and foreign currency deposits as of November 30, 2014. The financial terms of the transaction are not material to Citi. The transaction is expected to close in late 2015, subject to regulatory approvals and other customary closing conditions.
The sale represents another step in Citi's strategy of further streamlining its Global Consumer Bank as announced on October 14, 2014. Citi continues to pursue the possible sale of its credit card business in Japan, which is conducted through Citi Cards Japan, Inc., and the aforementioned transaction does not include the cards business.
Following the sale, Citi will continue to deliver the power of its unrivalled global network to its Japanese and non-Japanese corporate, institutional and governmental clients in Japan. Citi will serve these clients by focusing on its corporate and investment banking, markets and transaction services businesses conducted from Citibank Japan Ltd. and Citigroup Global Markets Japan Inc.
“This is a positive outcome for Citi, as well as for the employees and customers of our retail banking business in Japan. This decision furthers Citi's global strategy of focusing our resources where we feel we have a competitive advantage, which includes our Institutional Clients Group businesses in Japan. Citi has been in Japan since 1902 and it is an important market for Citi,” said Citibank Japan CEO Peter B. Eliot.
Citi's Institutional Clients Group advised Citi on this transaction.