FULL TEXT-Citigroup announces Japan expansion plans
TOKYO, Jan 30 (Reuters) - Citigroup (C.N) made the following announcement on Monday about its plans to expand in the Japanese market. Its plans include setting up a holding company and doubling the number of retail branches over several years.
Moody's said it expects to assign a long-term deposit rating of Aaa and a short-term debt rating of P-1 to Citibank's new entity in Japan. [ID:nWNA5498]. Standard & Poor's assigned its 'AA-' long-term and 'A-1+' short-term counterparty ratings to Citibank's Japan branches [ID:nWNA5499].
Citigroup's press release:
Tokyo, January 29, 2007 Citing its strategy to grow its international businesses, Citigroup Inc. today announced plans to localize its Japanese banking operations and unify oversight of its Japan-based businesses from a new local holding company. Citigroup stated that its localization plans are subject to obtaining all required governmental approvals and that it expects to be able to fully implement these plans by July 2007.
To localize its Japanese banking operations, Citigroup will set up a new locally incorporated bank to assume all of the operations currently conducted by Citibank, N.A. through its Japan-based network of 30 branches and sub-branches. Citigroup stated that establishing a local bank would enable it to accelerate growth plans in its retail and corporate banking businesses in Japan, while ensuring appropriate local governance of those businesses.
The new locally incorporated bank will be rated by Moody's Investor Services and Standard & Poor's LLC.
As part of its localization plans, Citigroup also will set up a new locally incorporated holding company to oversee Citigroup's business interests in Japan. Citigroup stated that the new holding company, which will be subject to supervision by the Financial Services Agency of Japan under applicable Japanese laws and regulations, will enhance Citigroup's ability to strengthen oversight and coordination of its multiple businesses in Japan.
In making its announcement, Citigroup said that it views Japan as a key market in its international expansion and that it considers localizing its banking operations and setting up a local holding company as a sign of its continued long-term commitment to investing in the world's second largest economy.
After localizing its banking operations, Citigroup plans to expand its retail banking presence in Japan by doubling the number of retail bank branches over the next several years, including opening five new branches during the remainder of 2007. Citigroup is already pursuing efforts to expand significantly the size of its corporate client base in Japan during the next several years.
Citigroup said that localizing its banking operations in Japan would enhance its ability to deliver the full range of products and services that it now provides to its retail and corporate banking customers in Japan. Citigroup will notify customers of the exact timeline for local incorporation of its banking operations once finalized with the relevant governmental authorities.
