Sumitomo Mitsui Financial Group Inc. will announce an agreement to buy Citigroup Inc.’s Japanese consumer-banking business as soon as next week, people with knowledge of the matter said.

The lending unit of Japan’s second-biggest bank by market value will purchase the operations from Citibank Japan Ltd. for about 40 billion yen ($330 million), said the people, who asked not to be named as the discussions are private.

Sumitomo Mitsui Banking Corp. is one of at least five local banks that began bidding for the assets in September, as Citigroup sells consumer-banking operations around the world to focus on faster-growing markets. The Japanese lender is seeking to get more business from wealthy individuals in a country with about $14 trillion in household financial assets.

“The deal shows Sumitomo Mitsui’s aggressive stance on pursuing M&A for growth,” Nana Otsuki, a banking analyst at Bank of America Corp. in Tokyo, said by phone today. “There’s a risk that some customers may walk away unless Sumitomo Mitsui can maintain the same quality of service that Citigroup offers through its global franchise.”

Tokyo-based Sumitomo Mitsui plans to inherit all of Citigroup’s retail banking employees, branches and client assets in Japan, the people said. The U.S. firm earlier gave Sumitomo Mitsui the right of first refusal to buy the business.

Citigroup remains in talks with Sumitomo Mitsui Trust Holdings Inc. to sell its Japanese credit-card unit, according to the people. The New York-based bank’s Citi Cards Japan Inc. unit owns the Diners Club brand in Japan.

While other Japanese companies are interested in acquiring the card unit, Citigroup currently has no plan to negotiate with them or start a fresh round of bidding, the people said.

Spokesmen for Sumitomo Mitsui, Citigroup and Tokyo-based Sumitomo Mitsui Trust declined to comment on the negotiations.

Shinsei Bank Ltd., Isetan Mitsukoshi Holdings Ltd. and JCB Co. will jointly seek to acquire the card business and are ready to start talks, the Nikkei newspaper reported on Dec. 6.

Sumitomo Mitsui has been expanding its wealth-management operations in Japan to generate more fee income. Last year, it agreed to acquire Societe Generale SA’s private-banking unit in the country. The Japanese lender formed a private-banking venture with Barclays Plc for affluent clients in 2010.

Citigroup is exiting 11 consumer-banking markets with poor returns, including Japan, where it wants to focus on corporate and investment banking, markets and transaction services, it said in October.

The U.S. bank opened a branch in Yokohama in 1902 and Tokyo in 1923. Citibank Japan, which employs about 1,800 people, had 32 retail branches in the country as of October.

Citibank Japan earned 1.34 billion yen in the year ended March, returning to profit from a net loss of 1.98 billion yen a year earlier, financial statements on its website show. It had 3.9 trillion yen in deposits as of Sept. 30.

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