Reaching out to serve a growing Japanese appetite for Western financial products, Citicorp plans to open an additional five to 10 branches in Japan over the next few years.

Michael S. Knapp, vice president and division head of Citicorp's consumer operation in Japan, said the branches would most likely be located in the Tokyo and Osaka regions. The U.S. bank already has 19 branches in Japan, where it runs a rapidly growing consumer banking business.

In serving Japan's consumers, Citicorp will be helped by its proposed merger with Travelers Group. The combination would allow the new Citigroup to sell an array of Travelers insurance products throughout the world.

Mr. Knapp stressed that Citicorp is building up its consumer banking activities in Japan by using alternative networks, such as phone, computer, and mail-based banking.

He also noted that the bank's recent agreement with Japan's Postal Savings System gives Citicorp customers access to an additional 24,600 automated teller machines across Japan, reducing the need for Citicorp to expand its own network.

Combined with existing agreements allowing Citicorp customers to use ATMs at Japanese money-center and regional banks, he added, Citicorp customers can bank via some 60,000 ATMs across Japan.

Citicorp provides a broad range of consumer banking services in Japan, including foreign currency deposits, credit cards, and personal accounts, in Japanese yen and in 14 foreign currencies.

It has also recently begun distributing a dollar-based credit card as well as a cash card that can store up to $10,000 for Japanese customers who need access to dollars while travelling abroad. The bank also plans to begin selling retail mutual funds in Japan in December.

The bank's local deposits surged in recent months amid growing concerns about problem loans at Japanese banks. Since the end of the first quarter last year, Citicorp has tripled the number of its customers and increased its foreign currency deposits by 50%, Mr. Knapp said. He declined to disclose exact figures.

The surge in business at Citicorp helped the bank turn a $1.8 million loss at March 31, 1996, into a $41 million profit at the end of the Japanese fiscal year on March 31, 1997.

Over the same period, the bank's total deposits, including corporate deposits, rose more than 50%, to $7.1 billion, and total assets increased by 25%, to nearly $20 billion.

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