Citigroup Inc plans to sell its Japanese investment banking unit Nikko Citigroup, along with Nikko Asset Management and retail brokerage arm Nikko Cordial Securities, Kyodo News reported on Monday. The three businesses combined could be priced at 800 billion yen ($7.98 billion), the report said, citing banking sources.
Citigroup shares were up 36 cents or 11.8 percent at $3.40 on the New York Stock Exchange near midday on Monday. Citigroup spokesman Jon Diat declined to comment. Media reports in February had cited a possible sale of the investment bank, but one source familiar with Citigroups strategy had said at the time that keeping Nikko Citigroup was vital to the groups presence in the worlds second-biggest economy.
Kyodo said Citigroup had indeed considered keeping Nikko Citigroup and selling the two other units, but later decided to sell all three. Citigroup is selling off its global assets after massive losses on toxic securities and a US government bailout. The bank has taken more than $45 billion of taxpayers money and the US government is expected to become Citis largest investor with a 36 percent stake.
Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group are expected to participate in a bidding, it said. A person familiar with the matter had told Reuters in April that Mitsubishi UFJ was the frontrunner to buy Nikko Cordial, Japans third-largest brokerage.