Tomahawk, WI 08/20/2014 (Basicsmedia) – Citigroup Inc. (NYSE:C) is reportedly trying to sell its consumer banking unit in Japan amidst low interests rates compared to other Asian countries and the U.S, according to Bloomberg’s, Francis Chan. The giant U.S bank is reported to have approached about ten banks, as it seeks to dispose of the assets, which have struggled over the years.

Bloomberg is reporting that Citigroup Inc. (NYSE:C) has already approached japans largest lending firms in a bid of trying to find out if they would be willing to buy any of the assets put up for sale. The move according to Chan is a reaction by the bank on weak loan demand in the country as well as falling interest margins that have considerably affected profits.

“If we look at banking margins in Japan, it is still low at only 1.1% this fiscal year which is the lowest in Asia according to consensus. […] In fact Citigroup only made 1% of the net profit from Japan last year I think the low return could be the reason for them to consider pulling out of the consumer banking business in Japan,” said Mr. Chan.

Citigroup Inc. (NYSE:C) operates approximately 33 branches in japan, representing only 1% of its global total. The bank has also been pulling out of the retail banking business in markets with low returns such as Japan. Foreign financial institutions have fallen prey to the competition being offered by local lenders who continue to dominate the space with monetary easing affecting interest margins.

Chan remains confident that Citigroup may reconsider its move on pulling out of Japan, considering not many Asian markets are providing impressive returns.

“I think they are more in the acquisition mode in the past, we see them buying into Korea buying into different regions in Asia. In fact I think they may reconsider this strategy just because some of the Asian Countries may not really show that kind of growth that Citigroup Inc. (NYSE:C) has expected before they made the acquisition,” said Mr. Chan.

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