Citigroup Plans to Establish New Investment Bank in China by Next Year
By Jing Yang and Yifan Wang
Citigroup Inc. is aiming to start securities and futures
operations in China by the first half of next year, joining a
string of international banks looking to expand into the
world's-second largest economy as Beijing opens up its financial
The third-largest U.S. bank by assets is planning to submit
applications to the China Securities Regulatory Commission for a
securities license that will allow it to underwrite
yuan-denominated stocks and bonds, as well as trade them for
clients. It will also seek a license for futures operations, a
person familiar with the matter told The Wall Street Journal on
The bank is planning to submit applications for the licenses by
June 30, and aims to have the business up and running in the first
half of 2022, the person said.
Citigroup is in the process of naming a chief executive officer
and a chief compliance officer for the China operations, as
required by the regulator. The new operations will have 100 to 120
people initially, the person said, adding that about 60% of the
staffers would be new hires and the rest will be existing
employees, particularly those in mainland China and Hong Kong.
The bank plans to grow the team to 150 people in the next five
years, the person said.
Citigroup's plans come as the world's biggest banks are
increasingly making inroads into the Chinese market as the country
opens its massive financial markets to foreign companies, a major
compromise made by Beijing in the first phase of the U.S.-China
trade pact signed in early 2020.
Goldman Sachs has applied for full control of its local
securities unit in China, while JPMorgan Chase & Co., UBS Group
AG, Credit Suisse Group AG and Morgan Stanley all already have
majority-controlled securities units. JPMorgan also operates a
fully controlled futures business in the country and is awaiting
approval to take 100% ownership of the local asset management
Citigroup has been behind the curve, partly because it had to
first exit an existing minority venture with Orient Securities Co.,
which it completed last year.
Bloomberg first reported details of Citigroup's China expansion
plan. The Journal had previously reported Citigroup intends to
apply for the securities and futures licenses in China.
The securities and futures business plan is in line with
Citigroup's strategic shift away from consumer banking and toward
lucrative wealth-management and institutional businesses in Asia,
serving a rising number of wealthy entrepreneurs and their
The new strategy is one of the first big changes under Citigroup
CEO Jane Fraser, who took the top job at the company last
Citigroup last week said it will exit its consumer franchises in
13 overseas markets, 10 of which are in Asia.
Write to Ben Otto at firstname.lastname@example.org
(END) Dow Jones Newswires
April 19, 2021 07:17 ET (11:17 GMT)
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