June 6 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, will withdraw from the consumer finance business in Japan to transfer capital to more profitable areas.

Citigroup will close all of its 32 branches and 540 automated loan machines as it halts marketing of consumer finance operations in Japan, the New York-based company said in an e- mailed statement today.

The company is revising global operations after reporting losses and writedowns from the U.S. subprime mortgage crisis totaling $42.9 billion, more than any other bank, according to data compiled by Bloomberg. The bank said last month it will close two U.K. loan operations and stop offering certain home and personal loans.

``We have taken a series of significant steps globally to strengthen the balance sheet, improve risk management, and reorganize the company, which have put Citi on the path to future growth driven by its core businesses,'' Citigroup Chief Executive Vikram Pandit said in the statement.

Citigroup opened its first Japanese branch in Yokohama in 1902 and has 16,000 employees in the country. The bank listed its shares for trading on the Tokyo Stock Exchange in November after an almost decade-long hiatus. It was forced to close its private banking business in Japan in 2004 after regulators said the firm failed to conduct proper checks against money laundering.

`Growth Opportunities'

Citigroup said in January, 2007 it will shut about 80 percent of its consumer finance branches in Japan, a month after new laws in the country capped the interest rate non-bank lenders can charge. It has already closed 270 branches and 100 loan machines.

The company still operates a brokerage with 110 branches, a retail bank with 31 branches and an investment bank in Japan.

``We are committed to allocating capital to the highest growth opportunities,'' Nikko Citi Holdings Inc. Chairman Douglas Peterson said in today's statement.

Citigroup will eliminate 10 percent of positions at its Japan investment bank as part of global cutbacks following a record fourth-quarter loss, two people with direct knowledge of the plan said earlier this year. Nikko Citigroup Ltd., the company's investment banking unit, will fire as many as 170 of its 1,700 employees, the people said.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

Last Updated: June 6, 2008 05:46 EDT