Citigroup Inc. plans to give Sumitomo Mitsui Financial Group Inc. the right of first refusal this month to buy its Japanese consumer-banking business, sources said.

Sumitomo Mitsui's lending arm is in talks with Citigroup to purchase the retail bank for about ¥40 billion to ¥50 billion, according to the sources, who asked not to be named because the discussions are private.

If the buyout is successful, Sumitomo Mitsui Banking Corp. will retain all of Citigroup's retail bank staff and branches in Japan, the sources said.

Citigroup is seeking to complete the transaction by the end of the year, while it may delay the sale of its local credit-card operations until next year, the sources said.

Sumitomo Mitsui Trust Holdings Inc. is in talks with Citigroup to purchase the card business, which owns the Diners Club brand in Japan, the sources said. Some other Japanese card companies are also interested in that aspect of business, they said.

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, the New York-based bank said in October.

Sumitomo Mitsui is interested in expanding its business for wealthy individual clients through the banking deal, the sources said.

Elisa Fukui, a spokeswoman for Citigroup in Tokyo, declined to comment. Spokesmen for Sumitomo Mitsui weren't immediately available to comment. Sumitomo Mitsui Trust spokesman Hiroshi Kashimoto declined to comment.