Citigroup has said it will postpone the merger of two Japanese units in order to delay integration costs, but still plans an initial public offering for its majority-owned fund management business in Japan, according to Reuters.
Douglas Peterson, Citigroup’s Japan head, told a news conference this week that the firm still intends to oversee an IPO for Nikko Asset Management, but would delay the merger of Nikko Citigroup and Nikko Cordial Securities.
The amalgamation of investment bank Nikko Citigroup and brokerage Nikko Cordial Securities had been scheduled for March 2009, but is now likely to take place in 2010.
According to the report, Mr Peterson said the decision to put the project on hold was made from a cost and technology point of view, adding that the merger was not a top priority for Citigroup’s technology team in the next six to nine months.
Having suffered credit losses and writedowns in excess of $50 billion from the credit crisis, Citigroup has announced its intention to cut 52,000 jobs, taking its global headcount down to around 300,000.
As part of its cost-cutting measures Citigroup is selling its Japanese trust bank NikkoCiti Trust and Banking to Mitsubishi UFJ Financial Group. Citigroup acquired 50 per cent of the former Nikko Trust and Banking Corporation from Nikko Securities in 2001.