Nikko Cordial said Mr Douglas Peterson was named as its CEO and president on Tuesday, replacing Shoji Kuwashima. Mr Peterson will also serve as the head of Citigroup Japan Holdings Ltd, the local unit of the New York-based banking company.

Citigroup Inc. exchanged 175.7 million shares of its stock for 290.1 million shares of Nikko Cordial Corp, the companies said in a joint statement. That share swap was worth US$4.8 billion (S$6.81 billion) based on Citigroup's closing price on Monday in New York.

The shares were swapped at the ratio of 0.602 Citigroup stock for each Nikko Cordial share, based on an agreement made in November, the companies said.

By becoming Citigroup's fully owned subsidiary, Nikko Cordial 'will create Japan's leading comprehensive financial services group which covers both banking and securities businesses,' it said, adding the deal would also add 'more value' to the Nikko brand.

Citigroup has been working to streamline operations and cut costs after reporting a US$10 billion loss in the fourth quarter of 2007 because of unexpected subprime mortgage-related losses.

Nikko has more than 100 branches across Japan and the acquisition is expected to strengthen the US group's foothold by selling mutual funds and providing other financial services in the world's No. 2 economy.

In 2004, Citigroup lost its private banking licence in Japan after authorities accused it of failing to implement safeguards against money laundering, misleading customers about investment risks, and other violations. -- AP