Citi bank branch in Singapore’s central business district on February 12, 2018.
Huaiying Ore | Bloomberg | Getty Images
SINGAPORE – Citi’s commercial banking unit has set up a Chinese office in Singapore dedicated to helping “emerging” Chinese companies grow in the city-state and in Southeast Asia, the bank told CNBC .
Citi Commercial Bank serves growing mid-sized businesses with annual revenues of up to $ 1 billion. Many of these Chinese companies have their eyes set on expanding overseas, even though their large domestic market offers plenty of growth opportunities.
And Singapore, a commercial and financial center in Southeast Asia, has emerged as a preferred destination among Chinese companies of various sizes. Major Chinese companies expanding in Singapore include tech giant Tencent, owner of TikTok ByteDance, and video streaming platform iQiyi.
Lin Hsiu-Yi, Head of ASEAN and Singapore at Citi Commercial Bank, said, “Singapore and the entire ASEAN region are key markets for the expansion of emerging Chinese companies. Most of these clients have established holding companies for their ASEAN units in Singapore. “
ASEAN refers to the Association of Southeast Asian Nations, an economic bloc made up of 10 countries in the region, including Indonesia, Singapore and Vietnam.
The New China office is headed by Mona Zhang, a banker who previously focused on mid-sized businesses at Citi Commercial Bank’s China office.
The move by several Chinese tech companies to establish or expand their operations in Singapore over the past year is also part of a regulatory crackdown on big tech in China. Regulators have targeted monopoly practices, the collection and use of data – and are now focusing on how companies use algorithms to sell products to consumers.
Citi said its revenue from supporting customer activity and flows from China to Singapore more than doubled last year compared to the previous year. Citi said the number of China-based clients working with the U.S. banking giant in Singapore increased 35% last year.
Citi cuts retail banking
The establishment of Citi Commercial Bank’s new Chinese office in Singapore follows the bank’s announcement in April of its intention to pull out of retail banking in 13 markets. Many of these markets are in Asia Pacific, including Australia, China, India and Indonesia.
Citi chief executive Jane Fraser told CNBC in April that the bank is “doubling down” in areas such as institutional banking globally and wealth management in the Americas and Asia. Commercial banking is part of Citi’s institutional business.
In Asia, China’s “strong presence” in trade flows and business activity means the bank will expand its Chinese office in Singapore and establish new ones in other markets, said Rajat Madhok, director of Citi Commercial Bank in Asia-Pacific. .
Citi Commercial Bank operates in 11 Asia-Pacific markets, which account for approximately one-third of the bank’s global commercial banking revenues.