Citigroup is mulling to divest its retail banking business in Japan as the group rethinks its global operations after a series of regulatory issues in the US and abroad.
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The decision could allow the US bank to focus on its remaining businesses in Japan that include corporate banking, investment banking and trading. Citibank Japan has 33 retail branches across Japan, with deposits of JPY3.9 trillion ($38 billion).
The U.S. bank, which has repeatedly been penalized by Japanese regulators in the past 10 years, would follow HSBC Holdings Plc and Standard Chartered Plc in scaling back in a country where loan profits are hampered by low interest rates.
The repeated clashes with Japan’s main banking regulator, the Financial Services Agency, would have prompted the bank to take this decision.
In the latest incident in 2011, the FSA found that Citi’s retail bank failed to fully explain the risks of some investment products offered to clients, prompting Citibank’s Japan CEO at the time, Darren Buckley, to resign.
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By GlobalDataCitigroup has exited the Japanese retail brokerage business in 2009, selling its Nikko Cordial Securities unit and part of its investment-banking operations to Sumitomo Mitsui Financial Group.
