(Adds details on banks, background)
By Taiga Uranaka
TOKYO Aug 20 Citigroup Inc is considering
the sale of its Japanese retail unit and has approached about 10
banks, a source with direct knowledge of the matter said on
Wednesday, as the U.S. banking company struggles to turn around
its Japanese operations.
Citigroup's move came as Japan's banking industry suffers
from weak loan demand and falling interest margins. Despite a
recent pickup in lending, deposits still overwhelm loans as
businesses and households remain cautious on spending.
Citigroup, whose presence in Japan dates back over 100
years, has decided to pull out of the unprofitable retail
business as part of cost-cutting measures, said the source, who
was not authorised to discuss the matter publicly.
Citigroup is preparing to sell the retail operations of
Citibank Japan, which has 33 branches and about 3.6 trillion yen
($35 billion) in deposits, the source said. It had approached
about 10 financial institutions including Japan's top three
lenders and regional banks.
The U.S. bank will keep corporate and investment banking and
trading businesses in Japan, the source said.
A Citigroup spokesman declined to comment.
Citigroup has been under pressure to overhaul its Japanese
operations after repeatedly running foul of regulators since
2004, when it was forced to close its private banking business
in the country due to poor money laundering controls.
(1 US dollar = 102.9 Japanese yen)
(Reporting by Taiga Uranaka; Additional reporting by David
Henry; Editing by Jan Paschal and Stephen Coates)