Citigroup plans major expansion in China
Updated: 2010-12-08 09:24
By Susan Li (China Daily)
|Citigroup plans to triple its workforce in China to as many as 12,000 people in the next three years.[Photo/China Daily]
Third-largest US bank to have 100 mainland outlets in 3 years
HONG KONG - Citigroup Inc aims to triple the size of its branch network on the Chinese mainland to about 100 outlets within three years as the US bank vies with HSBC Holdings Plc for a bigger slice of the mainland's banking market.
"We are very excited about China," said Stephen Bird, Citigroup's co-chief executive officer for the Asia-Pacific region.
"For us, this is still the beginning of the China story."
Citigroup, the third-biggest US bank, trails London-based HSBC, which operates 105 outlets in the world's second-largest economy. The company is drawing closer to severing government ties as the US Treasury Department starts selling its remaining stake, the result of a $45 billion bailout in 2008.
The bank, based in New York, currently has 31 outlets on the Chinese mainland. Bird said Citigroup will add outlets in Changsha, Hunan province, and Nanjing, Jiangsu province. Standard Chartered Plc has 61 outlets.
Citigroup plans to triple its workforce in China to as many as 12,000 people in the next three years, Bird said in August.
Foreign banks' operations in China are dwarfed by those of competitors like Industrial and Commercial Bank of China Ltd (ICBC), the world's largest lender by market value.
Beijing-based ICBC has more than 16,000 outlets in China and generated 106.5 billion yuan ($16 billion) of pretax profit in the country in the first half, almost double the global total for Citigroup.
"The combined market share of foreign banks in China is less than 2 percent," said Victor Wang, a Hong Kong-based analyst at Macquarie Capital Securities Ltd. "They can't go into head-to-head competition with mainland lenders."
Citigroup's expansion in China is part of Chief Executive Officer Vikram Pandit's bet on Asia, where economies have rebounded faster from the global financial crisis than have the United States and Europe.
It generated $1 billion profit from the region in the third quarter, almost half the bank's total net income.
Bird said China's government is taking "prudent and sensible" measures to cool the economy. Chinese regulators have sought to limit credit expansion after record lending in 2009 stoked a surge in property prices and raised the risks that bad debts will balloon.
"They are more aware of the potential bubbles, particularly in housing, than anyone else," Bird said.
Xinhua News Agency said on Dec 3 that the country will shift to a "prudent" monetary policy next year as the government seeks to rein in liquidity, combat accelerating inflation and limit the risk of asset bubbles.
China and the world set to embrace the merciful, peaceful year of rabbit
Historical records and Caucasian features of locals suggest link with Roman Empire.
Coastal Yantai banks on little things that matter to grow
The State Council launched a new round of measures to rein in property prices.