SMBC Trust bank to purchase Citibank Japan’s retail banking business

SMBC Trust Bank, a wholly owned subsidiary of Sumitomo Mitsui Banking Corporation (SMBC), has reached an agreement to acquire Citi’s retail banking business, Citibank Japan. The acquisition is expected to be completed by October this year.

The offerings of investments including structured products will remain the same although this could be reviewed upon completion of the transaction, said a spokesperson of SMBC Trust Bank.

SMBC Trust Bank said in a statement that the acquisition is part of its plan to expand its high net worth individuals (HNWIs), together with the offering of corresponding investments such as foreign currency investment products and global services.

Citibank Japan's retail banking includes the bank’s network of branches and ATMs, around 1,600 employees, about 740,000 customer accounts and approximately $21bn (Y2.5 tr) of yen and foreign currency deposits as of November 30, 2014.

While expanding the bank’s customer base with the inclusion of a younger age group, the acquisition will enhance foreign currency funding sources.

As reported, Japan’s Financial Services Agency imposed administrative actions on Citi in 2009 prohibiting sales for one month, due to the suspicion of money laundering, and a ban in 2011 on selling products including structured deposit for one month due to mis-selling.

SMBC Trust Bank, formerly Société Générale Private Banking Japan, was acquired and renamed by SMFG group in October 2013. The acquisition was a strategic move by SMBC group to position its private banking for HNWIs as a core business and to provide tailor-made solutions including structured products to customers with different needs.

Citi announced last week that is exiting consumer banking in 11 markets as part of a strategic move to accelerate the transformation of its global consumer banking (GCB) business including the bank’s consumer franchises in Costa Rica, the Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in South Korea.