Mitsubishi UFJ Financial

(MTU)

will cancel its plan to pay $262 million for

Citigroup's

(C) - Get Report

Japanese trust bank, a report says.

Mitsubishi UFJ Trust, a unit of Japan's biggest bank, in December agreed to buy NikkoCiti Trust and Banking in an all-cash deal for 25 billion yen ($262 million).

But Mitsubishi UFJ, or MUFG, decided to walk away from the deal after failing to acquire Citigroup's Japanese brokerage earlier this month,

Reuters

reports, citing a person familiar with the matter.

Mitsubishi UFJ Trust and NikkoCiti said in a joint statement on Thursday that they were abandoning the deal.

"We have decided that considering changes in our two firms' strategy and environment, scrapping the planned acquisition of (NikkoCiti Trust shares) was desirable for both firms' growth," they said,

Reuters

reports.

MUFG had been a leading bidder for Citigroup's Japan brokerage unit, Nikko Cordial Securities, but lost out to rival

Sumitomo Mitsui Financial

earlier this month. MUFG decided that owning NikkoCiti Trust alone would bring limited benefits, according to Japanese media reports.