UPDATE 1-Sumitomo Trust likely buyer of Nikko Asset-Nikkei

(Adds companies declining to comment)

TOKYO, June 26 (Reuters) - Sumitomo Trust and Banking (8403.T) is in final talks to buy Citigroup's (C.N) asset management arm in Japan for more than 100 billion yen ($1 billion), the Nikkei business daily reported on Friday.

Sumitomo Trust has outbid U.S-based Bank of New York Mellon Corp (BK.N) and Japanese insurer T&D Holdings Inc (8795.T), the Nikkei said.

Spokesmen for Sumitomo Trust and Nikko Citi Holdings, Citigroup's holding firm in Japan, declined to comment.

Nikko Asset Management is Japan's third-largest fund manager with about $90 billion in assets under management.

Citigroup put it up for sale as part of efforts to recover from heavy losses in the global financial crisis. ($1=95.86 Yen) (Reporting by Yumiko Nishitani and David Dolan)