Citigroup Inc, the biggest US bank, will step up efforts to
court Chinese small and medium-sized enterprises (SMEs) as its
business in that sector generated triple-digit growth last
year.
The first group of overseas lenders will soon be issued with
licenses to conduct business as local entities, after which they
will compete with domestic rivals in various fronts, especially in
renminbi retail business, wealth management and corporate
financing.
Citigroup, which holds stakes in Shanghai Pudong Development
Bank and Guangdong Development bank, plans to add about 1,000
workers to its China operations this year, boosting its staff
strength in the country to around 4,000, the lender's chief
executive for China business, Richard Stanley, said yesterday.
He also said Citigroup was keen to engage in brokerage business
and would launch the operation once regulatory restrictions are
removed.
But the lender, which runs 16 outlets across China, has decided
to expand heavily its SME business and broaden client relationships
in southern, eastern and northern China.
"Although SMEs have become a powerful impetus behind China's
fast-growing economy, they still face difficulties in addressing
various operational and financing issues," said Henry Zhang,
China's commercial banking head at Citigroup.
Figures released by the China Banking Regulatory Commission this
week indicated that outstanding bank lending to Chinese SMEs
reached 5.35 trillion yuan at the end of 2006, an increase of 15.8
percent from the beginning of the year.
SMEs, usually companies with annual revenues of less than 30
million yuan, accounted for only 23.7 percent of total yuan loans,
though last year's growth rate was slightly higher than the 15.07
percent rate for all loans.
The overall non-performing loan ratio at Chinese commercial
banks was 7.09 percent at the end of December.
Even though Chinese banks are usually less enthusiastic when it
comes to SMEs, the sector has aroused the interest of many overseas
lenders.
HSBC, Europe's biggest bank, aims to attract smaller enterprises
with products and services designed for them, according to Neil
Tottman, head of commercial banking at HSBC China.
Britain's Standard Chartered last year launched a new initiative
to offer financial solutions to SMEs in China and Africa venturing
abroad.
(China Daily March 15, 2007)