Citi to Sell Nikko Cordial Securities to Sumitomo Mitsui Banking Corp.

Citigroup said it will sell its Japanese domestic securities business to Sumitomo Mitsui Banking Corporation for $7.9 billion or ¥774.5 billion.

SMB reached the agreement to buy Nikko Cordial Securities Inc brokerage on Friday and the deal will include $2.1 billion or ¥201 billion in retained cash and debt payments to Citi.

"This is a great outcome for Citi and Sumitomo Mitsui Financial Group, as well as for the employees and clients of Nikko Cordial Securities said Citi CEO Vikram Pandit, where the transaction is part of the step and strategy executed by the Citicorp or Citi Holdings.

The transaction is expected to generate approximately US$2.5 billion of tangible common equity for Citi at closing, with Citi expected to recognize an after-tax loss of approximately US$0.2 billion

Meanwhile, shares of Citi rose 7 cent to 2.30 percent to $3.12 in the New York Stock trading.