Sumitomo Mitsui to buy Citigroup's Japan retail operations

Sumitomo Mitsui Financial Group's lending arm agreed to buy Citigroup's Japanese consumer-banking business to expand services for wealthy individuals in the country.

SMBC Trust Bank, a subsidiary of Sumitomo Mitsui Banking Corp, will purchase Citibank Japan's retail banking operations that include 2.4 trillion yen ($20 billion) in deposits of about 740,000 customers, around 1,600 employees and 32 branches, the lenders said in a joint statement on Thursday. The transaction is subject to regulatory approvals and expected to close in October next year, they said, without giving financial terms of the deal.

The purchase comes as Sumitomo Mitsui seeks to get more business from high-net-worth individuals in a country with about $14 trillion in household financial assets and generate more fee income.

Last year, it agreed to acquire Societe Generale SA's private-banking unit in the country and started SMBC Trust. The Japanese lender formed a private-banking venture with Barclays Plc for affluent clients in 2010.