Norway picked Citigroup (C.N) over rival U.S. bank JPMorgan Chase & Co Inc (JPM.N) as custodian of its sovereign oil wealth fund, the world's biggest at $865 billion, the Financial Times reported on Sunday.
Officials at the banks were not immediately available for comment.
The award of a seven-year contract is set to be announced this week, the paper said.
Citi, the fourth-largest custodian in the world with about $14.5 trillion in assets under custody and sub-custody, last year combined its investor services unit - which includes custody - with its trading business, the paper said.
JPMorgan, with more than $20 trillion in assets under custody, is among the top three globally with State Street Corp (STT.N) and Bank of New York Mellon Corp (BK.N), took similar steps almost two years ago, the paper said.
JPMorgan has been hiring staff and investing hundreds of millions of dollars annually in the custodian business in the past few years, the paper said.
While the loss of Norway's oil fund as a client is a disappointment, the bank hopes to win at least two similar- sized mandates in the near future, people familiar with the business told the Financial Times.
(Reporting by Scott DiSavino; Editing by Eric Walsh)