Citi, the US-listed bank which has sustained heavy losses amid the credit crunch, is to sell its Italian private banking operations, WealthBriefing can confirm.

Earlier, a report in Il Sole 24Ore, the business newspaper, said that Citi will sell the private banking division to Spain’s Santander, but did not disclose a sum. A spokesman for Citi declined to comment.

Citi is selling and leasing back its Milan headquarters for the private bank, WealthBriefing understands.

Citi will retain its investment banking and institutional unit.

The US bank has been shedding some assets to replenish its capital. In May, Citi said it is to sell Nikko Cordial Securities, the Japanese brokerage it acquired last year.

Citi is, however, adding to some private banking business areas. The bank is understood to be looking to hire experienced high net worth bankers as well as support staff as part of its plans to form a dedicated HNW service in the EMEA region, as was reported last week.

In April, Citi named Jane Fraser as the new chief executive of its private banking unit. She replaces Ned Kelly, who was recently made chief financial officer at Citi.

It is understood that Citi remains committed over the long run to the Italian market and the closure of the private bank will leave other Citi operations in Italy unaffected.

Citi has booking centres for EMEA clients located in London, Jersey (Channel Islands), Switzerland and New York.