Citigroup Inc (NYSE:C) Looking For Buyers, Will The Bank Exit The Japanese Market?

Sources have it that Citigroup Inc (NYSE:C) is planning on exiting the Japanese market due to the regulatory problems and weak lending options.

Citigroup Inc (NYSE:C) was the only international company that started its retail banking in the country of Japan. The company also introduced its 24/7 ATM services in the respective country; however, Citigroup plans to leave the market as its operations in Japan were unable to cover the costs that it incurred- let alone any profits.

Citigroup Inc (NYSE:C) recently announced that it will focus on the expanding markets rather than the mature, saturated markets, such as Japan. It is important to note here that Citigroup ran its operations in Japan for over a century.

According to a source familiar with the matter, Citigroup Inc (NYSE:C) has approached Mizuho Financial Group (8411.T), Mitsubishi UFJ Financial Group (MUFG) (8306.T), Sumitomo Mitsui Financial Group (SMFG) (8316.T) and a number of other regional banks in order to initiate a sale deal.

The representative of Citigroup refused to comment on this news whereas the spokespersons from other banks could not be reached.

The source further added that Citigroup Inc (NYSE:C) will keep its investment, corporate and trading business alive in Japan.

Analysts are of the view that Citigroup Inc (NYSE:C) will have a difficulty finding a buyer as the bank has a long history of facing regulation problems in Japan. Moreover, the interest rates and loan demands are also on a decline in Japan.

One of the senior industry analyst said that regulators have penalized Citigroup three times- meaning that there is a compliance issue with the bank.

As of March 2014, Citigroup Inc (NYSE:C) had total of $35 billion in deposits at its 33 retail branches, bringing the bank to a 30^th position out of 64 top regional banks in the country. However, the bank was at the end of the list when its outstanding balance of 356.2 billion Yen was taken into consideration.

Citigroup Inc (NYSE:C) posted total revenues of 68.3 billion yen with a profit of 1.3 billion yen for its recent year.

The lending business is on a decline in the country of Japan, for the corporations are avoiding investment in different ventures.

Although the bank offers loans and mortgages, but a number of customers opened up their accounts in Citigroup due to the global services that it offers; if the news of Bank getting sold reaches the customers, most of the clients will withdraw their accounts from Citigroup.

The Bank will have to offer the buyers an incentive in order to keep the customers intact. Rumors have it that Citigroup Inc (NYSE:C) might offer continued access to some of its global services.

Coming to the stock price of Citigroup Inc (NYSE:C), the bank, on the last trade day, August 20, 2014, started its stocks at a price of $49.63 and closed at a price of $49.80. The bank has a market capitalization of $150.68 billion with a price to earnings ratio of 16.93. As far as the dividend yield of the company is concerned, it is recorded to be at 0.08 percent.