which now calls itself just Citi, hopes to become one of the first
western banks to start operating in China as a locally incorporated
bank. It has been granted final approval to incorporate locally, mirroring a similar announcement from Deutsche Bank earlier this week.
Local incorporation allows foreign banks to provide unrestricted local
currency retail banking and wealth management services to Chinese
nationals, and it gives them a regulatory framework similar to that of
Citi plans to double
the number of branches in China to more than 30 by the end of this
year, according to the Financial Times. It currently has 16 branches,
mostly in large cities on the eastern seaboard, and is preparing to
open its latest branch in Hangzhou, capital of Zhejiang province.
Last year, it obtained a 20% stake in Guangdong Development Bank as
a member of the foreign consortium that, exceptionally, was allowed to
take majority control of the bankrupt bank.
Big western financial institutions are falling over themselves in
the rush to get into China's newly liberalised retail financial
services market, either by incorporating locally, buying stakes in
local banks or both.
Foreign financial players predict a big huge pent-up demand for
their services from affluent Chinese consumers who are dissatisfied
with the limited choice and poor service offered by China's local banks.
But it will be interesting to see, a year or so down the line,
whether the Chinese retail banking market really lives up to today's
Elsewhere on the finance front:
A foreign firm has got a foot in the door of China's fledgling futures industry. The HK-based subsidiary of Calyon Financial, a US futures brokerage owned by France's Credit Agricole, has got approval
for a JV with Citic East China, part of the Citic state-owned
industrial group. The JV is set to become the first futures brokerage
in Shanghai and second futures brokerage in China that is jointly owned
by a Chinese company and a HK brokerage firm. The mainland's first
financial derivatives exchange was inaugurated last September and
trading should start later this year.