Citigroup Inc is looking to generate a steady and balanced growth in China this year as its global business struggles in the worldwide financial turmoil.
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| Citi China to cut costs, diversify [company website] |
In an exclusive interview with China Daily yesterday, the US financial conglomerate's China subsidiary chairman Andrew Au said Citi China will focus on improving productivity, lowering costs, engage in more profitable investments, and diversify product lines this year.
The bank will also open its third micro lending company in Northeast China later this year, said Au.
"China is still one of the high priority markets for us," he said. "We will continue to develop our businesses here like retail banking and lending despite the macro economic pressures," he said.
Citi China, one of the largest foreign banks in the country, reported yesterday a 95 percent surge in net income for 2008. The amount ballooned to 1.3 billion yuan, boosted by what Au said was the balanced growth of its businesses. Expressing confidence for continued growth this year also, he said "the performance in the first quarter has been satisfying."
The bank's main rival HSBC posted a profit before tax of US$321 million in China last year, while Standard Chartered Bank reported a 27 percent rise in operating income to US$632 million.
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| Citigroup Inc is looking to generate a steady and balanced growth in China this year as its global business struggles in the worldwide financial turmoil. |
Customer confidence in foreign lenders has declined in China due to their poor performance globally and many Chinese customers are switching over to domestic lenders.
In a statement released on Tuesday, the Shanghai headquarters of China's central bank said domestic banks in the city generated a substantial gain in deposits between January and March this year while deposits with foreign lenders declined.
Au assured yesterday that Citi China is free from liquidity problems due to its cash management efforts and healthy retail banking channels.
"If you believe the market reports that only a small number of foreign banks in China have achieved the regulatory requirement of 75 percent in loan-to-deposit ratio, then I can say that Citi China is definitely one of them," Au said.
However, the shrinking customer base has forced the bank to merge its private banking and consumer banking units, while the wealth management products came under severe criticism for low or negative yields.
"It's not accurate to say we are backing away from private banking," Au said. "The only change is how we are managing the business. Our customers are being served by the same team while they enjoy widening product lines and stronger support."
(China Daily April 16, 2009)
