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Four Japan banks likely to bid for Citi's Japan retail unit: sources

[TOKYO] Four banks including Sumitomo Mitsui Banking Corp (SMBC) are expected to participate in the second round of bidding for Citigroup Inc's unprofitable consumer banking business in Japan, bankers with knowledge of the matter said on Thursday.

Sumitomo Mitsui Trust Bank (SMTB), Shinsei Bank and Resona Bank are also likely to participate in Friday's bidding round, said the bankers, who declined to be named as they were not authorised to discuss the matter publicly.

The four banks were among those that had bid for the unit when it was initially put up for sale in September.

Japanese banks are interested in the unit because it has an estimated US$9 billion worth of dollar-denominated deposits, which would provide an easily accessible source of funds for the lenders' overseas expansion drive, the bankers said.

The sale of the consumer unit also includes Citibank's Diners Club card business.

SMBC is a unit of Sumitomo Mitsui Financial Group Inc, SMTB is a unit of Sumitomo Mitsui Trust Holdings Inc and Resona is a unit of Resona Holdings Inc.

Executives at Citibank Japan, Shinsei, Resona and SMTB declined to comment on the sale. SMBC officials were not immediately available for comment.

In the first bidding round, the highest offer for the unit was around 50 billion yen (US$440 million), the bankers said. The bidders in the second round may now offer less than that after taking a closer look at the unit's assets, said a bank executive.

The sale is part of Citibank's plan to shed retail businesses in 11 markets.

Citi is expected to pick a buyer for the Japanese business as early as in December, said the sources.