A Tokyo-based Citigroup spokeswoman acknowledged the bank is "considering a listing on the TSE" and said, "Japan is one of our key strategic markets and we are committed to it for the long term." Citigroup already has the largest foreign banking presence in Japan and last month said it plans to double the number of its retail outlets to 50 over several years. This all fits into a larger strategy involving local incorporation as a holding company by July, likely in order to take advantage of a change in law this May, allowing local foreign-owned subsidiaries to use shares in acquiring Japanese companies. However, Citi has encountered difficulties recently with some of its Japan operations including facing a possible delisting for brokerage Nikko Cordial, of which it owns a 4.9% stake. Also, a new law capping lending rates compelled Citi to reserve $375 million for losses and $40m for costs related to downsizing its consumer finance business.
Sources: Bloomberg, MarketWatch
Commentary: Eye on the Prize: Citigroup and Mizuho Battle for Nikko Cordial • Citigroup to Expand in Japan, Considers Listing on Tokyo Stock Exchange • Foreign Listings on Tokyo Stock Exchange Stagnant, Only 7 American Co's Remain
Stocks/ETFs to watch: Citigroup (C). Competitors: Mitsubishi UFJ Financial Group (MTU), Mizuho Financial Group (MFG), ABN Amro Holding N.V. (ABN). ETFs: iShares S&P Global Financial Index Fund (IXG), iShares Dow Jones US Financial Services (IYG), Financial Select Sector SPDR (XLF)
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