Business briefs: Citigroup to sell Japan retail branches to SMBC

TOKYO – Citigroup has agreed to sell its retail banking business in Japan to Sumitomo Mitsui Banking Corp., the companies said Thursday.

The deal involves the sale of Citibank Japan’s ATMs and 32 retail branches including 740,000 customer accounts and about 2.5 trillion yen (about $21 billion) worth of yen and foreign currency accounts to a trust bank subsidiary of SMBC.

It said about 1,600 Citibank employees in Japan will also be transferred to SMBC, one of three Japanese mega-banks.

The cost of the acquisition, which will close in late 2015, was not disclosed.

“This decision furthers Citi’s global strategy of focusing our resources where we feel we have a competitive advantage,” Citibank CEO Peter B. Eliot said in a statement.

Citigroup said it also is considering selling its credit card business in Japan, separately, as it streamlines its global banking and focuses on corporate and investment banking and other services.

Citibank said its customers will be able to use Citi’s global banking networks after the deal is complete – a key concern for local customers.

Japan is a tough banking environment thanks to meager interest margins and heavy competition, and most foreign banks have already closed up and gone home. Citi’s foreign currency deposits offer a way for SMBC to fund its expansion into overseas lending.

Saudi Arabia to tap reserves for budget

RIYADH, Saudi Arabia – Saudi Arabia’s Cabinet has endorsed a budget for 2015 that projects a slight increase in spending and a significant drop in revenues due to sliding oil prices, resulting in a $39 billion deficit.

The kingdom says it will dig into its reserves to cover the difference between $229.3 billion in projected expenditures and $190.7 billion in revenues for the coming fiscal year.

The budget approved Thursday reflects an expected drop in revenues of around $88 billion from $278.9 billion in 2014. It also shows an increase in spending of about 0.6 percent from the previous year.

Saudi-based investment firm Jadwa Investment says the deficit will be financed comfortably using the Saudi Arabian Monetary Agency’s huge stock of net foreign assets, which totaled $736 billion at the end of November.

Washington company to open cannery in U.S. territory

PAGO PAGO, American Samoa – A Washington state company is making a $70 million investment in a tuna cannery in the U.S. territory of American Samoa.

The canned tuna products from American Samoa will carry the “Made In USA” label, said officials with Tri Marine International. Based in Bellevue, Tri Marine took over the lease of a government property three years ago after another cannery closed.

Tri Marine’s cannery plant is expected to employ some 1,500 workers when fully operational and is operated by the company’s Samoa Tuna Process Inc., located in the seaside village of Atu’u.

The inauguration ceremony was planned for Jan. 10 but has been pushed back to Jan. 24 since there were last-minute delays in having materials delivered because of slowdowns on West Coast ports, Tri Marine’s Chief Operation Officer Joe Hamby said.

The new cannery will focus on the U.S. market, where tuna products from American Samoa are duty free, said Tri Marine Chief Executive Officer Renato Curto, adding that this helps offset the higher cost of processing in the territory as compared with industrialized centers in low labor cost countries like Thailand, the Philippines and China.