Sumitomo Mitsui to buy Citigroup units

Fri. May 01, 2009; Posted: 08:10 AM

TOKYO, May 1, 2009 (UPI via COMTEX) -- SMFJY | Quote | Chart | News | PowerRating -- Sumitomo Mitsui Financial Group, Japan's second-largest bank, agreed to buy two Citigroup Japanese units for $5.56 billion, the U.S. institution said Friday.

Citigroup said it will sell its brokerage and investment divisions to help raise capital ahead of the U.S. government's release of its so-called stress test of Citigroup's financial health, The New York Times reported.

The total transaction, in which Sumitomo Mitsui will buy holdings held by Citigroup and loans held by Nikko Corp., is valued at $7.9 billion.

Citicorp, based in New York, received three infusions totaling $45 billion in U.S. bailout money, resulting in the United States having a 36 percent stake in the financial institution.

The sale includes Nikko Cordial Securities, Japan's third-largest brokerage, and parts of Nikko Citigroup, Citigroup's investment banking unit in Japan, a joint statement issued by Citicorp and Sumitomo Mitsui said.

U.S. federal regulators are expected to reveal results of an exam of the country's banks next week, the Times said. The stress tests assess the banks' ability to withstand any further deterioration in the U.S. economy. Results could determine if Citigroup and others could begin repaying some of the federal bailout money they received.

www.upi.com

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