SHANGHAI/HONG KONG, CHINA: Citigroup Inc will close its privatebanking unit in China, which targeted the country's growing ranks of millionaires.

It will fold the operations into its consumer-banking arm as it streamlines its businesses, sources familiar with the situation said yesterday.

Citigroup declined to comment on the restructuring plan, but said it would continue to offer private-banking services.

'Citi remains entirely committed to the private-banking space in China, and we will continue to invest in it,' the bank said in a statement.

Several dozen employees at the three-year-old private-banking unit will be transferred to other positions in the bank, including the consumer-banking business, said the sources.

The unit's closure comes as the New York-based lender is close to selling a stake in its Smith Barney retail-brokerage business to Morgan Stanley, aiming to shore up its balance sheet.

Both its private bank and Smith Barney are under Citigroup's wealth-management group.

Citigroup's private-banking businesses elsewhere in Asia, including Hong Kong and Singapore, are operating normally. - REUTERS