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Citi to sell Japanese trust bank

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By Andrew Coen

December 1, 2008 12:37 pm ET

In an attempt to raise much-needed funds, Citigroup Inc. is set to sell its Japanese trust bank, published reports said.

New York-based Citigroup is expected to begin receiving bids for Nikko Citigroup Ltd. this week.

The sale could raise up to 40 billion yen ($425.9 million) for the struggling U.S. bank, according to published reports.

Tokyo-based Nikko Citigroup had 10.8 trillion yen ($108.6 billion) in assets under management Sept. 30.

Some major Japanese trust banks expected to make bids include Mitsubishi UFJ Trust and Banking Corp., a subsidiary of Tokyo-based Mitsubishi UFJ Financial Group; Osaka, Japan-based Sumitomo Trust and Banking Co. Ltd.; and Tokyo-based Mizuho Trust and Banking Co. Ltd., published reports said.

Citigroup has had four straight quarterly losses due to billions of write-downs on mortgage-related assets (InvestmentNews, Oct. 16)After Citigroup’s stock lost more than half of its value in a recent four-day stretch the, U.S. government announced plans to guarantee the bank $306 billion to cover risky assets and inject $20 billion of new capital(InvestmentNews, Nov. 24).

A call to Citigroup’s press office was not immediately returned.

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