TOKYO (Reuters) – Struggling Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) plans to sell NikkoCiti Trust and Banking Corp, its trust bank unit in Japan, as part of its global restructuring efforts in a deal that could raise up to 40 billion yen ($420 million), Japanese media reported on Sunday.
An auction could be held as early as Monday, the Nikkei business daily said, without citing any sources.
Major Japanese trust banks such as Mitsubishi UFJ Trust and Banking Corp, a subsidiary of Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), Sumitomo Trust & Banking Co Ltd (8403.T: Quote, Profile, Research, Stock Buzz), and Mizuho Trust & Banking Co Ltd (8404.T: Quote, Profile, Research, Stock Buzz), are likely to make bids for the Citigroup unit, Nikkei said.
Kyodo news agency and several other Japanese dailies carried similar reports.
Yomiuri Shimbun said the sale could be worth 10 billion yen to 20 billion yen, while Nikkei said it may go for around 40 billion yen.
NikkoCiti Trust had 136 employees and 20 billion yen in capital as of Sept. 30, according to its website. Company officials were not immediately available for comment.
Earlier this month, the U.S. government unveiled a massive rescue plan for Citigroup, agreeing to shoulder most potential losses on about $306 billion of the bank’s risky assets, and to inject new capital.
Citigroup has said it would cut 52,000 jobs by early next year and continue to sell assets as it combats mounting debt losses and sagging economies worldwide.
The U.S. bank is not expected to make a major retreat from Asia, its strongest performing region, but it has slowed its aggressive expansion streak in Japan, where last year it paid about $8 billion for a majority stake in brokerage Nikko Cordial Securities Inc.
In October, the Nikkei newspaper said Citi will delay a planned merger of two of its Japanese units, Nikko Cordial Securities and investment bank Nikko Citigroup Ltd, to concentrate on strengthening group revenues in Japan.
Citigroup also plans to cut staff in Japan in addition to reductions already set elsewhere, the Nikkei financial daily reported recently.
The Nikkei said Citigroup was set to solicit voluntary retirements through early December among employees at units such as Nikko Cordial Securities.
(Reporting by Masayuki Kitano; Editing by Kim Coghill)