In a rare move toward a large-scale divestiture of a U.S. unit by a Japanese bank, Long-Term Credit Bank of Japan Ltd. is seeking a buyer for its government securities dealer, Greenwich Capital Markets Inc.

Tetsuo Makabe, general manager of the bank's North American planning division, said it is talking to "several entities" about a possible sale.

Market sources said London-based National Westminster Bank PLC is the most likely buyer. A spokesman for National Westminster declined to comment.

Sources estimated that Greenwich, which employs 400 and mainly trades U.S. government and asset-backed securities, is worth from $450 million to $600 million.

National Westminster recently sold its U.S. retail and commercial banking unit to Fleet Financial Group Inc. for $3.26 billion, leaving it with a sizable war chest for pursuing its ambition to become a major force in international capital markets.

Long-Term Credit Bank bought Greenwich for $144 million in 1988 and stands to make a sizable profit if the unit is sold.

Some analysts said a deal couldn't come at a better time for the Japanese bank, which is dealing with mounting loan problems at home.

As of September, the Tokyo-based bank's bad loans were estimated to exceed $12 billion, or nearly 7% of total loans.

"Greenwich Capital is one of the more successful acquisitions by a Japanese bank in the United States," said Andre Cappon, president of CBM Group Inc., "but basically, they need the money." CBM is a New York-based financial consulting firm.

Fred DeBussey, an analyst at Fitch Investors Service, noted that the bank is reorienting its strategy both internationally and in Japan and may not view Greenwich Capital as an essential component.

"I don't see this as a fire sale," Mr. DeBussey said. "Things are changing in Japan from a regulatory standpoint, and they may simply feel it makes sense to maximize their gains here and redeploy the funds into other parts of their operations."

Greenwich is one of 37 primary dealers in U.S. government securities that have recognized business relationships with the Federal Reserve. Japanese banks own nine of these dealers; European banks, seven; and Canadian banks, two.

Japanese banks expanded quickly in the United States during the 1980s as part of a broader buildup of their international activity, but they have been steadily scaling back activities here in the wake of a large increase in problem real estate loans in Japan.

Data compiled by International Banking Regulator, an affiliate of American Banker, showed that Japanese banks cut their U.S. assets by 13.3% in the second half of last year, to $382.7 billion.

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