Citigroup ( C) is reportedly seeking bids for its Japanese brokerage unit, Nikko Cordial.

After holding informal discussions with potential acquirers, including Japan's three largest banks, Citi has begun soliciting formal offers, according to the Financial Times, citing sources close to the situation. The troubled company is hoping to select a buyer by the end of April, the FT said.

Nikko Cordial could be worth between $5 billion and $9 billion, the FT said, but it is a far discount when compared to the roughly $13 billion Citi originally paid for it with cash and the gradual purchase of shares, completed last year.

The sale of Nikko Cordial would be a reverse in Citi's interest in expanding in Japan, once a crucial part of its international expansion strategy. Yet it follows the sale of Citi's German retail banking operations and the creation of a joint venture between Morgan Stanley ( MS) and Citi's profitable Smith Barney business.

The brokerage business is a part of Nikko Citi Holdings. The company will still operate in Japan through wholesale investment banking arm Nikko Citigroup Ltd., Nikko Asset Management and merchant banking business Nikko Principal Investments.

Standard & Poor's on Monday placed NikkoCiti on credit watch with negative implications. It currently rates the subsidiary's long-term debt and senior unsecured debt both at triple-B. It rates its short-term counterparty ratings at A-3, reflecting "increasing uncertainty over the company's financial performance and restructuring of its subsidiaries."

"The uncertainty over the restructuring of Nikko Citi Holdings' subsidiaries is increasing. Nikko Cordial Securities Inc. and Nikko Asset Management Co. Ltd., both of which are positioned as noncore companies within the group, are subject to business restructuring by Citigroup," S&P said. " T he sale of these subsidiaries, which have generated stable revenues, could undermine Nikko Citi Holdings' ability to maintain stable earnings."

Citi said in December that it planned to sell NikkoCiti Trust and Banking Corp., a separate subsidiary that offers trust services, to Mitsubishi UFJ ( MTU). The sale is expected to be completed this week.

Citi also has consumer banking operations in the country, but scaled back its consumer finance operations there last year.

Citi has been looking for ways to cut expenses and add to capital as it shaves non-core businesses from its lineup.

CEO Vikram Pandit has been under intense pressure to get the company profitable again, especially after taking some $45 billion in government bailout funds to solidify its capital levels against increasing losses from securities writedowns and troubled loans. Most recently, the government agreed to convert a portion of its preferred stake in Citi to common stock to boost the company's tangible capital levels.

Pandit said earlier this month that the company was profitable for the first two months of the quarter. Still, it remains to be seen exactly how the company will fare for the first quarter, given its provision levels. Analysts, on average, expect the company to record a loss of 24 cents a share, according to Thomson Reuters.

Given the ouster of General Motors' ( GM) CEO Rick Wagoner on Monday, Pandit's job may be increasingly at stake, as the company continues to struggle through the financial crisis. Pandit said he would take a salary of $1 until the company returned to profitability.

Shares of Citi recently were falling 8.4% to $2.40.