The consolidation of Asia's custody and trust industry continued this week with Citigroup's purchase of 50% of Nikko Turst, a wholly-owned subsidiary of Nikko Securities.

The new NikkoCiti Trust and Banking Corporation is to be managed as a joint venture and will focus on offering custody and trustee administration services in Japan. The combined books of the two organizations will total 7 trillion yen under administration, mostly from public and pension fund clients.

Under the deal, the joint venture will purchase the trustee and custody business currently conducted in Japan by Cititrust. And it will be run by joint presidents - Akira Hirano from Nikko and Stephen Turner from Cititrust.

Commenting on the announcement, Turner said the move would allow Citigroup to make inroads into the Japanese trust market which has traditionally been dominated by local firms. For Nikko, it will mean access to Citi's international client base.

Turner says the move has been driven by the bank's clients. "Our international clients have asked that, in order to provide seamless global services, we introduce local services supported by an established business in Japan. We believe that, in light of Nikko's history in Japan, the new entity will do just that in a way that distinguishes us from our competition."