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Citigroup to sell Japanese trust banking unit

(Agencies)
Updated: 2008-12-17 00:10

TOKYO -- As part of a global restructuring, Citigroup Inc. will sell its Japanese trust banking unit to Mitsubishi UFJ Trust and Banking Corp., the US firm's Japanese subsidiary said Tuesday.

A man walks past a Citibank branch in Tokyo November 24, 2008. The US government agreed to inject $20 billion of new capital into one of the world's biggest banks, Citigroup Inc, to avoid a collapse that could have wrought financial havoc around the globe. [Agencies]

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The all-cash deal, valued at 25 billion yen ($277.6 million), is expected to close around April 1, Nikko Citi Holdings Inc. said.

The decision by Citigroup to unload NikkoCiti Trust and Banking Corp. comes as the ailing US banking giant struggles to survive the global financial crisis. The New York-based bank averted collapse in November after Washington extended a last-minute lifeline worth $20 billion.

Since then, Citigroup has said it plans to cut about 50,000 jobs worldwide, on top of 22,000 cuts previously announced. It sold off its German retail banking unit earlier this month.

All current staff at NikkoCiti Trust and Banking will keep their jobs under new ownership, Nikko Citi said. The trust bank employed 136 people as of Sept. 30.

"In addition, the parties have agreed to seek opportunities to cooperate both in Japan and across the global that will leverage MUTB's core strength in Japan and Citi's global expertise and footprint in transaction services," Nikko Citi in a statement.

NikkoCiti Trust and Banking was established in 1993 as Nikko Trust Banking Corp. but was renamed in 2001 after Citigroup took over.

Mitsubishi UFJ Trust and Banking is a wholly-owned unit of Japan's top banking group, Mitsubishi UFJ Financial Group Inc., with 28 trillion yen ($310.9 billion) in managed assets.