Citigroup Inc. (NYSE: C) is set to sell its Japanese retail banking operations to a unit of Sumitomo Mitsui Financial Group Inc. (TYO: 8136) for an undisclosed price.
Since the deal was announced on Dec. 25, reports have pegged the purchase price at 40 billion yen ($333 million). Citibank Japan has 2.44 trillion yen ($20 billion) in deposits, according to a joint statement.
Sumitomo is facilitating the purchase through Sumitomo Mitsui Banking Corp. (SMBC). The deal comes as Citigroup, like other large companies, looks to exit what it considers to be assets that are outside of its core operations. In October, the New York-based investment bank announced plans that Japan was one of 11 markets that it wanted to leave, due to weak loan demand.
It also coincides with the perceived uptick in financial services M&A. For more, see Deal Professionals Predict Financial Services M&A Will Soar.
The deal includes Citibank Japan's 1,600 employees, about 740,000 retail customers and 32 branches. The retail operation will be combined with SMBC Trust Bank.
The companies said customers of Citibank Japan will continue to have access to Citi’s global ATM network, one of the most popular services among Japanese customers, after the SMBC acquisition.
SMBC senior managing director Nobuaki Kurumatani has said publicly that Citibank Japan’s 1 trillion yen worth of foreign-currency deposits from customers benefits the buyer as it explores growing overseas and broaden its lending services.
The transaction is expected to close in October 2015.