Citigroup to expand in China; eyes acquisitions in Japan, Taiwan

Our Corporate Bureau
30 March 2007

Mumbai: Close on the heels of its India plans, Citigroup Inc has proposed to double its number of branches in China this year to more than 30. "We intend to accelerate our network expansion with the aim of reaching more than 30 outlets by the end of 2007," chairman and chief executive Charles Prince said, adding, "China is crucial to our long-term ambitions."

Citigroup, which now has 16 outlets on the mainland, plans to hire about 1,000 staff in China this year, taking its workforce to around 4,000. Prince, however, declined to comment on media reports that Citigroup might cut 15,000 jobs, mainly in the US and Europe, as shareholders demand better performance.

The New York-based banking group is planning acquisitions in Japan and Taiwan and expansion in China that may add about 15,000 people to the payroll. "When we expand through acquisition, people come along with that," Prince said at a press briefing in Beijing. "We get lots of great people through transactions."

Citi has minority stakes in two regional lenders, which Prince said were making good progress. In 2003, it bought a nearly 5 per cent share of Shanghai Pudong Development Bank for $72 million, a stake it aims to increase to nearly 20 per cent this year.

Citigroup has already announced plans to open a branch in Hangzhou, the capital of thriving Zhejiang province, next month. Last year, a consortium led by Citigroup bought control of Guangdong Development Bank (GDB) in a $3.1 billion deal. Prince said that Citigroup was interested in China's brokerage sector, which is highly regulated by the government.

Citi was among the first batch of four foreign banks to be allowed to be incorporated as local banks, on March 20, allowing them to do business with Chinese households. Citigroup was also one of the first foreign banks to do business in China more than a century ago.