Sumitomo purchased 98.55% of Japanese Citigroup asset management stake

citygroup Thursday, Japan’s largest listed trust bank Sumitomo Trust & Banking Co revealed its intention to acquire a 98.55% stake in Citigroup Inc.’s Nikko Asset Management unit in Japan for ¥112.4 billion (equaled about $1.2 billion). The acquisition of asset management will be effective from October 1.

Sumitomo Trust explains the intention to buy almost all the firm’s outstanding stocks as a move to turn Nikko Asset into its subsidiary. Sumitomo has around ¥26 trillion in management assets, Nikko Asset management assets equals up to ¥9 trillion.

Sumitomo Trust also wants to raise its capital of ¥109 billion by issuing preferred shares. Sumitomo reported its group net profit declined to ¥12.20 billion from ¥12.95 billion a year earlier. Revenue declined 6% to ¥211.42 billion from ¥224.96 billion. However, Sumitomo Trust didn’t revise its earnings outlook for the fiscal year through March. The bank still expects a net profit of ¥45 billion on revenue of ¥1 trillion.

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