Jan.11, 2010, 1:16 a.m. EST

Citigroup Inc.'s top manager in Japan, Douglas Peterson, will return to a job in New York after overseeing the financial giant's sale of Japanese assets, a person familiar with the matter said Saturday.

Peterson will be replaced by Darren Buckley, head of Citibank Japan Ltd., Citigroup's Japanese retail and corporate banking unit, the person said.

Under Peterson's watch, Citigroup raised about $11 billion last year selling some of its Japanese assets, including Nikko Cordial Securities Inc. and its stake in Nikko Asset Management.

Citigroup also sold its Japanese trust banking unit, NikkoCiti Trust & Banking, to Nomura Holdings Inc., as part of its efforts to raise money to repay U.S. government bailout funds.

Last month, Citigroup said it repurchased $20 billion of trust preferred securities it had sold to the U.S. Treasury Department under the Troubled Asset Relief Program. The Treasury Department continues to own 7.7 billion shares of Citi common stock, worth more than $20 billion. See full story on Citi's TARP repayment.

In 2007, Citbank became the first foreign bank to get a local banking license, and vowed a deeper push into retail operations in Japan. But those plans were quashed by the global financial crisis.

Then in June 2009, financial regulators sanctioned Citibank Japan for the second time in five years, demanding it suspend some of its retail-business operations because of inadequate controls in place to prevent money laundering.

Peterson -- who joined Citigroup in 1985 -- was appointed to the helm in Japan in May 2004, in the wake of the first suspension.

In 2004, in one of the severest penalties ever imposed on a bank in Japan, the Financial Services Agency ordered Citibank Japan to suspend business operations at four branches that dealt with private banking, after it was found to have breached securities regulations.

The action essentially discontinued the bank's private-banking business in Japan.