Citi to sell Japanese trust banking unit

US banking major Citigroup will sell its Japanese trust banking unit to Mitsubishi UFJ Trust and Banking Corporation (MUTB) for about 25 billion yen (about $278 million).

Vikram Pandit-led Citi would be selling its trust banking unit Nikko Citi Holdings Inc and the deal is expected to close by April 1, 2009.

In a statement today, Nikko Citi Holdings, the 100 per cent subsidiary of Citi in Japan, said a definitive agreement has been executed with Mitsubishi UFJ Trust and Banking Corporation.

"...A definitive agreement has been executed to sell all of the shares of NikkoCiti Trust and Banking Corporation (NikkoCiti Trust) to Mitsubishi UFJ Trust and Banking Corporation. MUTB will pay an all-cash consideration of 25 billion yen," the statement said.

 

The sale is anticipated to be completed by April 1 next year subject to regulatory approvals and other closing conditions.

"As part of the transaction all employees of NikkoCiti will be retained," the statement noted.

NikkoCiti had more than 130 employees as on September 30.

"The parties have agreed to seek opportunities to cooperate both in Japan and across the globe that will leverage MUTB's core strength in Japan and Citi's global expertise and footprint in transaction services," it added.

NikkoCiti was established in 1993 and was then known as Nikko Trust Banking Corp. The entity was renamed following the takeover by Citi in 2001.

Severely hit by the ongoing financial turmoil, Citi has been selling its assets worldwide as part of the firm's restructuring efforts.