NEW YORK - Citicorp's Japanese consumer business should be profitable in the next two to three years, according to Masamoto Yashiro, the company's chief executive in Japan.

The only foreign bank with a retail branch network in Japan, Citicorp is looking to take advantage of weakness among domestic banks.

Offering |Unique Products'

It already has done so in corporate banking, which is making profits, Mr. Yashiro said in a recent speech to the Japan Society in New York.

On the retail side, where "we are not trying to compete with Japanese banks," the Citicorp executive said, "we are trying to offer unique products like foreign currency deposits and other nontraditional products."

Japanese banks have been hurt by real estate loan losses and a general decline the stock market. Their troubles have prompted more corporate customers to use Citicorp, Mr. Yashiro said.

A Total of 21 Branches

Structured and corporate finance are two areas that have grown as the Japanese banks have dealt with their problems.

Citicorp has 21 branches in Japan, two just opened. It has no plans to add branches until the retail operation is profitable, Mr. Yashiro said.

Citicorp also has no plans for acquisitions in Japan because they would cost too much, he added.

He said that the political instability in Japan will have little impact on Citicorp. Elections are scheduled for July 18, and Mr. Yashiro said uncertainty may persist for some time.

Political Turmoil

"I don't think we are concerned about who is in leadership. We are concerned about our corporate and consumer customers," he said. So the turmoil "is of little importance to us."

He said a new political party being led be a former finance minister, Tsutomu Hata, "could get power, but it is not really obvious who really will be in power."

Regardless, there is likely to be a coalition government. Even if it has the appearance of stability, "I assure you, there will still be instability," Mr. Yashiro said.

Says a Two-party System Is Possible

Major business decisions "will not be made until the dust settles," Mr. Yashiro said. "Usual business matters will continue, but anything requiring political solutions or involvement will not get done. Hopefully, out of this we will get a two-party system."

Mr. Yashiro said he sees Japanese deregulation as inevitable, "particularly with the political upheaval and the changes to be expected in the coming years."

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