Money

Citi plans more investment in branch network

By Li Xiang (China Daily)
Updated: 2011-04-01 13:15

CHONGQING - Citibank,the New York-based consumer banking division of Citigroup Inc, plans to increase investment in its branch network in Asia this year. That's as the bank continues to seek growth in China by opening more "smart banking" outlets, said senior bank executives.

The bank on Thursday opened a full-service airport outlet in Chongqing, which is its eighth "smart bank" in China employing advanced technology, including interactive video and wireless Internet, to improve services for customers.

"We are undertaking a large expansion plan in China for our retail branch business," Jonathan Larsen, head of consumer banking and cards for Citi Asia Pacific, told China Daily. "The opening reflects our confidence in the ongoing economic advancement of Chongqing and western China."

Larsen said that Citibank plans to add about 100 smart bank outlets in Asia this year, representing a significant investment for the company.

Like the branch it opened at Shanghai's metro station last year, the Chongqing airport outlet is aimed at attracting the newly-affluent commuters. Citibank plans to reach out to a wider section of the population by making banking and wealth management services more relevant and accessible, Larsen said.

China's rapid economic growth has led to the increasing accumulation of wealth and a rise in consumption, providing significant business opportunities for foreign banks eager to tap into the domestic market.

Chongqing is a good example of that emerging market. It is the gateway to western China and the regional economic hub, and the average annual per capita income of its citizens is likely to rise to 31,000 yuan ($4,700) by 2015, according to the municipality's development guideline set in 2010.

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The city also plans to develop into a regional financial center by 2015, with the financial services sector accounting for about 10 percent of its GDP, according to the local government.

"The government hopes that the foreign banks' presence here will help drive up local financial business substantially," said Ding Can, deputy director of the Chongqing Office of the China Banking Regulatory Commission.

Citibank currently operates 36 outlets in China, while its rival HSBC has 108 and Standard Chartered 66.

Larsen said that if the smart-banking model proves successful in China, Citibank will open more outlets, although the pace of expansion is still subject to local regulatory approval.

In the meantime, Citibank is well-positioned to expand its wealth management business in Asia, including China, by taking advantage of the rapid accumulation of private wealth created by the region's burgeoning economic growth.

Asia is expected to become the world's largest wealth management market by 2012. Larsen said that the market will continue to grow and China will continue to be a key market for the bank.

"With the Chinese market becoming more liberalized and sophisticated, we will expand our product range to offer a wide variety of investment options," Larsen said.

Citibank is the largest wealth-management provider in Asia with assets of $185 billion under management in the region.