SMFG to buy chunk of Citigroup
TOKYO: Sumitomo Mitsui Financial Group said Friday that it had agreed to buy Citigroup's Japanese brokerage arm as part of a 545 billion yen (5.5 billion dollars) deal with the troubled Wall Street giant.
The purchase of Nikko Cordial Securities and part of the investment bank Nikko Citigroup is the latest example of a Japanese bank swooping on a wounded US rival to expand its operations during the global financial crisis.
Citigroup, which lost 18.7 billion dollars in 2008, has been looking for buyers of its non-core businesses as part of a strategy to survive the financial crisis.
The Wall Street giant took a controlling stake in Nikko Cordial in 2007 as its partner reeled from a fraud scandal. It acquired full ownership of the firm last year.
SMFG reportedly outbid its two larger rivals Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. in an auction of the assets.
Japanese banks, less severely affected by the subprime loan crisis than many of their peers in North American and Europe, have seized the opportunity to buy a slice of struggling Wall Street giants.
But they have not been immune to the financial turmoil. SMFG, Japan's third largest bank, last month said it expected a net loss of 390 billion yen (3.9 billion dollars) for the past year to March due to the economic crisis.
Japan's biggest bank Mitsubishi UFJ Financial Group said Friday it suffered an estimated net loss of 260 billion yen in the year to March.