US bank Citi reaffirmed its commitment to providing financial services to high net worth individuals in China following a Reuters report that it was shutting its private bank in the Asian country as part of a business restructuring programme.

The three-year-old unit's operations, serving high net worth clients, will be folded into Citigroup's consumer banking arm as part of an internal restructuring of its wealth management services in China, Reuters said, citing unnamed sources.

However, responding to calls from WealthBriefing, Citi said it was not departing the private banking business in China and will continue to provide services for high net worth clients. "Citi remains entirely committed to the private banking space in China, and we will continue to invest in it. Any speculation that we are halting our business in this area is untrue. We continue to provide our clients with superior service as we look to expand our wealth management offering in China," a spokeswoman said.

In its report, Reuters said several dozen employees at the unit will be transferred to other positions inside the bank, including the consumer banking business, said the sources, who declined to be identified as they were not authorised to speak to the media.

The unit's closure comes as the New York-based lender, the third-largest US bank by assets, is close to selling a stake in its Smith Barney retail brokerage business to Morgan Stanley aiming to shore up its balance sheet. Citi has booked heavy losses related to the credit crunch.

Both its private bank and Smith Barney are under Citigroup's wealth management group.

Citi's private banking businesses elsewhere in Asia, including Hong Kong and Singapore, are operating normally and it is unclear whether the decision to close the China operation would herald similar restructuring elsewhere, said the sources.

Both foreign and local lenders, including HSBC, Standard Chartered, Bank of China and Bank of Communications, rushed to launch private banking services in China in recent years, jostling for business from a rapidly growing wealthy class created by the once-booming economy.

Citi started private banking in China in 2006, targeting wealthy Chinese with net worth of at least $10 million, a typical threshold for such services globally.