Citigroup Inc. has held the second round of an auction to sell its retail and credit card businesses in Japan, apparently short-listing two domestic banks, sources close to the matter said.
Sumitomo Mitsui Banking Corp. and Sumitomo Mitsui Trust Bank are considered potential buyers of Citibank Japan Ltd.’s retail division and Citi Cards Japan Inc., the sources said Friday.
Citigroup aims to select a buyer as early as this month, with the possibility of selling the units to two separate companies.
It appears Shinsei Bank Ltd. and Resona Bank also joined Friday’s bidding. The four domestic banks passed the initial round in September.
The U.S. financial group has attracted buyers with over ¥1 trillion worth of foreign-currency deposits held at Citibank Japan, a longtime leading foreign bank for affluent customers in the country, as well as with the credit card business of the Diners Club brand.
But the bidders have also paid attention to the cost of maintaining or renovating transaction systems, which seems bigger than earlier thought, the sources said. Citigroup will negotiate with the bidders on details, such as how many employees at the Japanese units would be retained in the acquisition.
Citigroup has 33 retail branches across Japan with deposits of over ¥3 trillion. It will maintain the corporate banking business in the country.
Last month, Citigroup announced it will pull out of the consumer banking business in a total of 11 markets to focus on others with more growth potential.
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