Sumitomo Mitsui eyes stake in Nikko Asset: report

TOKYO (Reuters) - Japan's Sumitomo Mitsui Financial Group (8316.T) (SMFG) is considering buying a stake in Nikko Asset Management after Sumitomo Trust and Banking (8403.T) buys the asset manager from Citigroup Inc (C.N), the Asahi newspaper reported on Friday.

Sumitomo Trust, which is in final talks with Citigroup to buy Nikko Asset, Japan's No. 3 investment trust provider, for over 100 billion yen ($1 billion), will negotiate with SMFG on the size of SMFG's stake, the Asahi said, without citing sources.

SMFG aims to achieve synergy between the investment trust product business of Nikko Asset and the sales operations of Nikko Cordial Securities, the retail brokerage which SMFG agreed in May to buy for 545 billion yen ($5.7 billion), the newspaper said.

The deal may give SMFG, Japan's third-biggest bank, and Sumitomo Trust a chance to deepen their ties, the daily said.

SMFG has also explored the possibility of merging Sumitomo Trust with Chuo Mitsui Trust Holdings (8309.T), the paper said.

($1=95.83 Yen)

(Reporting by Yumiko Nishitani; Editing by Chris Gallagher)