Citigroup Inc. will offload its trust banking arm in Japan to a unit of Mitsubishi UFJ Financial Group Inc. as part of the global financial conglomerate's effort to slim down its unwieldy operations.
Mitsubishi UFJ Trust and Banking Corp. said Tuesday that it will buy NikkoCiti Trust and Banking Corp. from Citigroup International and Nikko Citi Holdings for roughly $277 million. The trust bank unit of Japan's largest bank said the all-cash deal would help it expand its asset administration services for investment trust funds and other clients.
The deal is expected to close about April 1.
The move was the latest step by Citigroup to reduce its operations after the U.S. government agreed to pour $20 billion of capital into it and absorb as much as $249 billion of potential losses on real estate loans and securities that it holds.
Late last week, Nikko Citi Holdings Inc. said it would delay the merger of Nikko Cordial Securities Inc. and Nikko Citigroup Ltd., citing the massive cost burden at a time when Citigroup is restructuring globally.
Citigroup also reportedly offered early retirement to Nikko Cordial employees and 1,000 accepted the offer.