Citigroup expands in China, mum on job cut reports http://www.reuters.com/article/bankingfinancial-SP/idUSPEK21234720070329
Thu Mar 29, 2007
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BEIJING, March 29 (Reuters) - Citigroup Inc. (C.N: Quote, Profile, Research) plans to double its number of branches in China this year to more than 30, Chairman and Chief Executive Charles Prince said on Thursday.
Citi was among the first batch of four foreign banks that won approval on March 20 to incorporate as local banks, allowing them for the first time to do business with Chinese households, which have amassed $2 trillion in savings.
Prince, who is on an Asian tour, told reporters that local incorporation was a milestone.
"We intend to accelerate our network expansion with the aim of reaching more than 30 outlets by the end of 2007," he said. "China is crucial to our long-term ambitions."
Citigroup, which now has 16 outlets on the mainland, has said it plans to hire about 1,000 staff in China this year, taking its workforce to around 4,000.
Prince declined to comment on media reports that Citigroup might cut 15,000 jobs as shareholders demand better performance and a higher stock price.
Prince also declined comment on Dutch bank ABN AMRO Holding NV (AAH.AS: Quote, Profile, Research), which is in talks to be taken over by Britain's Barclays Plc (BARC.L: Quote, Profile, Research).
Citigroup had been seen by analysts as a possible counterbidder for ABN AMRO, but sources familiar with the matter said on Wednesday that Barclays had hired Citi as an adviser, effectively ruling the U.S. group out of contention.
Citigroup, one of the first foreign banks to do business in China more than a century ago, has already said it plans to open a branch in Hangzhou, the capital of thriving Zhejiang province, next month.
Prince reaffirmed that Citigroup was "very interested" in China's brokerage sector, which is highly regulated by the government.
As well as its own branches in China, Citi has minority stakes in two regional lenders, which Prince said were making good progress. Last year, a consortium led by Citigroup bought control of Guangdong Development Bank (GDB) in a $3.1 billion deal, beating rival bidders including Societe Generale (SOGN.PA: Quote, Profile, Research).
In 2003, it bought a nearly 5 percent share of Shanghai Pudong Development Bank (600000.SS: Quote, Profile, Research) for $72 million, a stake it aims to increase to nearly 20 percent this year. Citigroup China Chief Executive Richard Stanley told reporters that staff training would be a priority at GDB, which accumulated a high ratio of non-performing loans under its previous owner, Guangdong's provincial government.
((Reporting by Kirby Chien, writing by Alan Wheatley, editing by Anne Marie Roantree; alan.wheatley at reuters.com; +8610 6598 1235)) Keywords: CHINA CITIGROUP
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