Japan Shuts Citigroup Private Bank Operations

TOKYO – Japan on Friday ordered the commercial banking unit of Citigroup Inc. to close its Japanese private banking offices, shutting it out of the lucrative business and prompting the second apology this week from the bank’s international operations.

The Financial Services Agency (FSA) ordered Citibank to suspend operations at a branch in Tokyo and three satellite offices in Osaka, Nagoya and Fukuoka as of Sept. 29.

Citibank then has one year to terminate accounts at the offices, at which point their licenses will be revoked.

The bank may apply for new licenses to continue its private banking operations at other locations, but the punishment effectively forces it out of the industry in Japan.

Regulators said they had found a long list of problems at the private banking operation, including failing to prevent suspected money laundering, lax screening of customer information and improper trading practises.

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