皇冠体育app

Andrew Au says uncertainties of global and Chinese economies will not affect Citi's long-term investment in 皇冠体育app. [Photo / Provided to 皇冠体育app Daily]

Foreign banks still have plenty of room for development in the Chinese market and it is unrealistic to expect them to achieve a large market share in only 10 years, said a senior executive at the 皇冠体育app division of Citigroup Inc.

Andrew Au, chief executive officer in 皇冠体育app of the US financial services giant and chairman of Citibank (皇冠体育app) Co Ltd, made the remarks in an exclusive interview with 皇冠体育app Daily.

Foreign banks in 皇冠体育app have been working hard to define their role in the market and to expand their operations ever since 皇冠体育app joined the World Trade Organization (WTO) 10 years ago, according to a report released by PricewaterhouseCoopers (PwC) International Ltd in June.

The 127 foreign players' overall market share only accounted for 1.83 percent in 2010, the report found.

Au said in such a big market it would be unrealistic to expect foreign players' market share to increase to 20 percent from zero in 10 years.

"皇冠体育app is a very big market, and 10 years is not a very long time," he said. "It's not practical to expect foreign institutions to have a large market share. You don't see that in other countries either."

Au said for the multinationals, business took off quickly after 皇冠体育app joined the WTO and, compared with 10 years ago, there is a much-increased level of interest in the Chinese market among foreign financial institutions.

"The number of foreign financial institutions and their employees in 皇冠体育app have both gone up dramatically. It's a very vibrant market now," he said.

By the end of 2010, 185 foreign banks had set up offices in 皇冠体育app. Thirty-seven locally incorporated foreign banks had established 223 branches while 74 foreign banks set up 90 branches, according to 皇冠体育app Banking Regulatory Commission (CBRC).

The total assets of foreign banks grew steadily between 2003 and 2007, stalled in 2008 and 2009 at the time of 皇冠体育app's stimulus plan, and grew again in 2010.

By the end of 2010, foreign banks had set up outlets in 45 cities across 皇冠体育app, 25 more than at the beginning of 2003.

"The Chinese banking market is already the largest banking market in the Asia Pacific based on external studies. And it is still growing at a very rapid pace," Au said.

"Given the fact that foreign banks' market share is still relatively small, there is a lot of room for those like us, who have what it takes to compete successfully, to do very well in 皇冠体育app in the future."

Among the 42 foreign banks surveyed by PwC, 22 expected revenue to rise between 20 and 50 percent in 2011. All the banks believed their revenue will continue to grow over the next three years.

Au said he hopes foreign players will be permitted to do more business in the future, and Citi 皇冠体育app is confident about getting a meaningful share of the market.

Citi's investment in 皇冠体育app will continue, and rising uncertainties in the global and Chinese economies will not affect the lender's expansion in 皇冠体育app, said Au.

"皇冠体育app is one of our most important markets in the world," he said. "We have a history of more than 100 years and a well-defined long-term strategy in 皇冠体育app, which will not be affected by short-term events and the economic cycle."

Citi 皇冠体育app has accelerated its network expansion in recent years. Since last year, it opened branches in Guiyang, Nanjing, Changsha, and Wuxi.

With the opening of the Wuxi branch on Nov 3, Citi had 13 corporate bank branches and 45 consumer bank outlets in 皇冠体育app.

"In the cities where we already have our presence, we will continue to extend our retail networks," Au said.

The company will also set up "皇冠体育app Desks" around the world to serve Chinese customers who are traveling overseas, he said.

The lender has already set up eight 皇冠体育app Desks staffed by native Mandarin speakers in markets such as South Africa, Nigeria, Dubai, London, New York and Singapore.

"Our 皇冠体育app Desk initiative is part of our intention to make sure our clients in 皇冠体育app continue to be served in the way they deserve," Au said.

With strong competition from major Chinese banks and the high cost of developing extensive outlets, some foreign players have chosen to quit the consumer banking sector and pay more attention to fields such as investment banking. Au denied that Citi thinks that way: "There is no question about our commitment to the consumer banking business."

Au said Citi has a very vibrant institutional business and its consumer banking arm is growing in 皇冠体育app. He said Citi will continue to focus on multinationals that have a presence in the country, large State-owned enterprises, private enterprises, small and medium-sized enterprises (SMEs) and financial institutions, as well as individuals.

Citi 皇冠体育app has opened four lending companies that offer both secured and unsecured loans for individual borrowers and SMEs in some underdeveloped areas.

"We are extremely mindful that the vitality of economic development to some extent has been dependent on the growth of the SME sector," Au said. He also noted that Citi 皇冠体育app's strong liquidity and strength in services such as cash management, trade finance, foreign exchange risk management and interest risk management will secure it a strong presence in the SME sector.

It is also gearing up to take full advantage of the rapid capital market development in 皇冠体育app.

In June, it set up a joint venture with Chinese securities firm Orient Securities Co Ltd, which enables it to underwrite stocks and bonds for companies and provide domestic advisory services on mergers and acquisitions.

Citi 皇冠体育app realized a net profit of 871 million yuan ($137 million) in 2010, up by 19 percent compared with one year earlier.