TOKYO (AP) — Citigroup has agreed to sell its retail banking business in Japan to Sumitomo Mitsui Banking Corp., the companies said Thursday.
The deal involves the sale of Citibank Japan's ATMs and 32 retail branches including 740,000 customer accounts and about 2.5 trillion yen (about $21 billion) worth of yen and foreign currency accounts to a trust bank subsidiary of SMBC.
It said about 1,600 Citibank Japan employees in Japan will also be transferred to SMBC, one of three Japanese mega-banks.
The cost of the acquisition, which will close in late 2015, was not disclosed.
"This decision furthers Citi's global strategy of focusing our resources where we feel we have a competitive advantage," Citibank CEO Peter B. Eliot said in a statement.
Citigroup said it also is considering selling its credit card business in Japan, separately, as it streamlines its global banking and focuses on corporate and investment banking, and other services.
Citibank said its customers will be able to use Citi's global banking networks after the deal is complete — a key concern for local customers.
Japan is a tough banking environment thanks to meager interest margins and heavy competition and most foreign banks have already closed up and gone home. Citi's foreign currency deposits offer a way for SMBC to fund its expansion into overseas lending.