Citigroup to increase China's workforce to 12,000 in three years

plans to almost triple its workforce in China for as much as 12,000 people in the next three years, stepping up its rivalry with HSBC Holdings Plc in the fastest growing major economy in the world.

The New York-based bank will hire more in China than in any other country in the Asia-Pacific, Stephen Bird, a Citigroup official co-CEO for the region, said yesterday in an interview. The expansion may be the third market in China by the staff of Citigroup, after the United States and Mexico, said spokesman James Griffiths.

Citigroup CEO Vikram Pandit raises its bet on China, where the bank has granted a record $ 1.4 trillion dollars in new loans last year. Unlike HSBC and Standard Chartered Plc, Citigroup does not intend to sell shares in China and instead finance the expansion of the money generated in Asia, Bird said Aug. 25.


"It's a strong message that reports of Citigroup focus of the bank and its dedication to the country," said Michael Werner, an analyst at Sanford C. Bernstein & Co. in Hong Kong. "China is one of the most attractive and profitable country in the world to operate a bank."

Citigroup employs 4,500 people in China and 50,000 in Asia, according to Griffiths. Standard Chartered, the British bank that gets more than three quarters of profits from Asia, has over 4,000 employees in its unit China. HSBC first bank in Europe by market capitalization, has more than 5,000. Industrial & Commercial Bank of China Ltd. had 390,000 workers at the end of 2009.

"China is a priority market for Citi globally," said Bird, 43. "We have aggressive plans for consumer banking expansion and want to open branches as soon as the regulators in China will allow us to do."

The branch expansion

Citigroup has 29 outlets across the country and plans to add 10 more this year. It will always be short-term leave of HSBC 102 outlets and 59 operated by Standard Chartered.

Bird said consumer and corporate bank account for about 80 percent of new hires in China. The rest will be mainly for technology support and data processing, he said.
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China, which opened its banking sector to overseas companies in December 2006, is luring foreign lenders marked by the global financial crisis that has forced Citigroup in a $ 45 billion bailout. HSBC focuses on emerging markets like China following the loss of its U.S. subsidiary.

Commercial banks in China has "a healthy bottom line" due to regulated interest rates and 30 percent annual growth in paid services such as custody, settlement and credit cards, said Werner.

ROE

"The more than 20 per cent return on equity that Swiss banks generate are very attractive, especially as regards the more developed markets, he said.

Citigroup nearly doubled its profit in China to 1.3 billion yuan (191 million dollars) in 2008, on a revenue increase of 46 percent. The company has not released 2009 earnings for the country, "said Griffiths.

The bank owns 20 percent of Guangdong Development Bank Co., a lender based in the southern city of Guangzhou. It also owns about 3 percent of Shanghai Pudong Development Bank Co.

Bird said he is "optimistic" to find a local partner for a company to subscribe for securities in China, a measure that would compete with Citigroup Goldman Sachs Group and UBS AG in the organization shares denominated in yuan and bond sales.

Profit Driver

Asia is the biggest contributor to results from Citigroup in 2008 and 2009, a period in which it lost 29300000000 dollars. Citigroup posted a profit in the first half of 2.5 billion dollars for the region over the 7.26 billion dollars in revenue.

"We are investing more in Asia than at any other time in our history," said Bird.

Citigroup's deposits in Asia rose 20 percent in June from the previous year to a record $ 220 billion, said Griffiths. It offers mobile banking services in most of the 18 markets in the region it serves, and began to retail banking in Vietnam last year, he said.

The bank is also expanding in Taiwan and Hong Kong, where it has 66 branches and 41 respectively, according to the birds.

"Just a few years ago we were less than 50 branches in Greater China and in the next six months, we should reach the 150 mark," he said.

To contact the reporter on this story: Cathy Chan in Hong Kong kchan14@bloomberg.net