Sumitomo Mitsui Banking Corporation’s (SMBC) wholly owned subsidiary SMBC Trust Bank has signed an agreement to acquire Citibank’s retail banking business in Japan.
Under the terms of agreement, SMBC Trust would acquire entire retail banking business of Citibank Japan, including nearly 740,000 retail customers, 32 branches, 1,600 employees and approximately JPY2.5tn ($21bn) foreign currency deposits.
All products and services of Citibank Japan’s retail banking business will be transferred to SMBC Trust.
SMBC Trust, which is into private banking, said that it plans to offer more value added products and services by improving collaboration with its parent and group companies.
Citibank Japan CEO Peter Eliot said: "This is a positive outcome for Citi, as well as for the employees and customers of our retail banking business in Japan.
"This decision furthers Citi’s global strategy of focusing our resources where we feel we have a competitive advantage, which includes our Institutional Clients Group businesses in Japan.
"Citi has been in Japan since 1902 and it is an important market for Citi."
In accordance with the transaction, the two companies inked a comprehensive agreement that would enable SMBC Trust to continue offering services through Citi’s overseas network, including overseas Citigold lounges for Citigold customers.
SMBC will continue the provision of asset management consultation service to Citigold and Citigold Premium customers by designated bankers and preferential fee services.
While the companies withheld the financial details, people familiar with the matter told The Walls Street Journal that SMBC will pay Citi between JPY30bn and JPY50bn ($250m and $417m) depending on the number of customers and deposits it inherits.
Subject to necessary regulatory approvals, the transaction is expected to complete by October 2015.
Image: Mitsui building in Tokya. Photo: courtesy of Wiiii.