Company to shut Japan trust unit in light of scandal

TOKYO -- Citigroup Inc. said yesterday it will close its trust banking unit in Japan within a year, after Japanese authorities ordered the US financial services giant to suspend its private banking business there.

Charles Prince, Citigroup's chief executive, apologized to Japanese authorities for the problems and said the company would appoint a new chief executive for Citibank Japan.

Japan's Financial Services Agency last month suspended the private banking division of Citibank, a unit of New York's Citigroup, and said it would revoke its license after a year, effectively expelling it from the Japanese market.

The agency accused the private bank of failing to implement safeguards against money laundering, misleading customers about financial risks, and other violations.