Citi, Sumitomo Mitsui Reach Nikko Deal

Updated from 6:33 a.m. EDT

Citigroup (C Quote) has reached an agreement in principal to sell Nikko Cordial and parts of Nikko Citigroup to Japanese bank Sumitomo Mitsui Financial , according to a published report.

Sumitomo Mitsui, Japan's second largest bank by market value, is expected to acquire Nikko Cordial Securities, Citigroup's retail brokerage unit, and some operations of Nikko Citigroup, a wholesale investment bank, according to The Wall Street Journal, citing people familiar with the situation. The deal is expected to be announced later this week, the paper said.

The deal is expected to be worth more than 500 billion yen ($5.2 billion), Reuters reports. It was reported earlier by Japan's Nikkei newspaper, but it hasn't yet been made clear exactly which parts of Nikko Citigroup that Sumitomo Mitsui was looking to buy, Reuters notes. Media reports have previously said it would likely include the operations servicing small and medium-sized firms.

If the deal materialized, Sumitomo Mitsui would be the first Japanese bank to buy a top brokerage in Japan, the Nikkei said. Sumitomo was competing against rivals Mitsubishi UFJ Financial Group (MTU Quote) and Mizuho Financial Group (MFG Quote) for the Citi units.

Citi did not immediately respond to a request for comment.