Citigroup to list shares in Tokyo, boost branches
TOKYO (Reuters) - Citigroup (C.N) plans to list its shares in Tokyo and boost the number of its branches in Japan by 40 percent as the U.S. financial group looks to move beyond a niche role in the world's second-largest economy.
The company, which first said in February it was considering a Japanese listing, said it planned to list its shares, not depositary receipts, on the Tokyo Stock Exchange.
Ruling out depositary receipts would likely mean the world's largest financial group would pursue a Japanese initial public offering, though spokeswoman Atsuko Yoshitsugu said nothing had been decided.
The company also said it aims to lift its number of branches across the country to about 200, although Yoshitsugu declined to specify a time frame.
Citigroup now has about 140 locations across the country, including 32 Citibank outlets. Branches of brokerage Nikko Cordial Corp. 8603.T, which it acquired in a $7.9 billion buyout in April, account for the rest.
To further its Japan strategy, Citigroup said it had tapped Howard Baker, a former U.S. ambassador to Japan, and Masajuro Shiokawa, a former Japanese finance minister, for advice.
Three years after Japanese regulators forced Citigroup to shut down its private banking business due to rule violations, the firm is attempting to rebrand itself for the Japanese market.
This month it relaunched its local unit, Citibank Japan Ltd., as a Japanese bank, becoming the first foreign lender to receive approval to operate as a local entity.
It has also begun to push beyond its base in Tokyo, opening branches in suburban areas and regional cities.
Citigroup hopes to tap into Japan's "mass affluent" market -- individuals looking for investment products such as mutual funds and cross-asset portfolios, but not wealthy enough for the boutique services offered to clients with ultra-high net worth.
Total Japanese household financial assets amount to about $13 trillion, with much of that sitting in low-yield savings accounts. Banks, brokers and asset managers have been eager to draw those funds into investments.
Citi confirmed that Shiokawa, the former finance minister, would chair a panel to advise on its expansion strategy. Baker, a three-term Republican senator from Tennessee before he became U.S. ambassador, will serve as vice chairman.
Citigroup's Yoshitsugu declined to comment on media reports that Hiroshi Okuda, the former head of both Toyota Motor Corp. (7203.T) and Japan's most influential business lobby, would also serve on the panel.
