(Reuters) - Japan’s Sumitomo Mitsui Trust Bank is in exclusive talks with Citigroup Inc (C.N) to buy its credit card business in the country, the Nikkei reported, as the U.S. lender goes ahead with plans to exit consumer banking in the country.
Sumitomo Mitsui Trust, part of Sumitomo Mitsui Trust Holdings Inc (8309.T), is eyeing to reach an agreement next month to buy the Citigroup unit, which offers Diners Club credit cards in Japan, the Nikkei reported. (s.nikkei.com/1zyzOuq)
The Japanese bank expressed its interest in buying Citigroup’s credit card business for more than 50 billion yen last fall, the Nikkei reported.
Sumitomo Mitsui Trust is also reviewing its technical capabilities for a smooth transition of the business.
Earlier, Shinsei Bank Ltd (8303.T), department store operator Isetan Mitsukoshi Holdings Ltd (3099.T) and credit card service provider JCB Co Ltd had jointly expressed interest in buying the credit card unit, the Nikkei reported in December.
But Sumitomo Mitsui Trust won exclusive negotiation rights due to its size and stable operations, the Japanese daily reported.
Citigroup was not immediately available to comment.
Citigroup agreed in December to sell its Japanese retail banking operations to Sumitomo Mitsui Banking Corp (SMBC), a unit of Sumitomo Mitsui Financial Group Inc (8316.T).
The acquisition price was not disclosed, but sources with knowledge of the deal had told Reuters that SMBC would acquire the business for about 40 billion yen ($333 million).
Citigroup said in October it was pulling out of consumer banking in 11 markets, including Japan, to cut costs. Its Japanese consumer banking business has been hurt by weak loan demand and falling interest margins.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Joyjeet Das