Citigroup,
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.
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 excited expectations.
Elsewhere on the finance front:
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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.
