Citigroup Inc. is in final talks to sell its Japanese credit card unit to Sumitomo Mitsui Trust Holdings Inc. for at least ¥40 billion, sources said.
The U.S. bank plans to reach a final agreement with Sumitomo Mitsui Trust Bank Ltd. as early as next week to sell Citi Cards Japan Inc., which owns the Diners Club brand in Japan, for ¥40 billion to ¥45 billion, according to the sources, who asked not to be identified because the matter is private.
Globally, Citigroup is exiting 11 consumer banking markets in which returns have been poor, including Japan, where it wants to mainly focus on corporate and investment banking. The bank agreed in December to sell its Japanese retail banking business to Sumitomo Mitsui Financial Group Inc.
Citigroup spokeswoman Elisa Fukui and Sumitomo Mitsui Trust spokesman Hiroshi Kashimoto declined to comment. In a statement, Sumitomo confirmed it was considering acquiring the unit, without giving details.
Goldman Sachs Group Inc. is advising Sumitomo Mitsui Trust on the acquisition, while Citigroup Global Markets Japan Inc. is acting for its parent, according to the sources. Goldman Sachs spokeswoman Hiroko Matsumoto declined to comment.
Citi Cards Japan was formed in 1977. Diners Club has been in Japan since 1960, making it the oldest card in the country, according to Citigroup's Japanese website.
Sumitomo Mitsui Trust is seeking to strengthen its wealthy individual business by taking over the clients of Citigroup's card unit, according to the sources. Citi Cards Japan has about 750,000 customers, one of the sources said.
Citigroup started the process to sell its consumer banking and card units around September. In December, sources with knowledge of the matter said Sumitomo Mitsui Trust was in exclusive talks with Citigroup to acquire the business.
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