Citis Bank branch in the Central Business District of Singapore on February 12, 2018.
Ore extraction | Bloomberg | Getty Images
SINGAPORE – Citi’s Commercial Banking unit has set up a China desk in Singapore to help “emerging” Chinese companies expand into the city-state and Southeast Asia, the bank told CNBC.
Citi Commercial Bank serves growing medium-sized companies with annual sales of up to $ 1 billion. Many of these companies from China are looking to expand overseas – even if their large home market offers many growth opportunities.
And Singapore, an economic and financial center in Southeast Asia, has become a preferred destination for Chinese companies of all sizes. Big Chinese companies that have expanded into Singapore include tech giant Tencent, TikTok owner ByteDance, and video streaming platform iQiyi.
“Singapore and the wider ASEAN region are key markets for growing emerging Chinese companies. The majority of these customers set up holding companies in Singapore for their ASEAN units, ”said Lin Hsiu-Yi, head of ASEAN and Singapore at Citi Commercial Bank.
CNBC Pro’s Stock Picks and Investment Trends:
ASEAN refers to the Association of Southeast Asian Nations, an economic bloc that includes 10 countries in the region, including Indonesia, Singapore, and Vietnam.
The new China desk will be headed by Mona Zhang, a banker who previously focused on medium-sized companies in the Citi Commercial Bank office in China. Citi Commercial Bank’s other China-focused desks are in Hong Kong and India.
The move by several Chinese tech companies to set up or expand offices in Singapore last year also comes as regulatory measures against big tech are underway in China. Regulators have targeted monopolistic practices of data collection and use – and are now turning their attention to how companies use algorithms to sell products to consumers.
Citi said its revenue from supporting customer activities and flows from China to Singapore more than doubled last year compared to last year. The number of China-based clients the American banking giant works with in Singapore has increased by 35% over the past year, Citi said.
Citi is shrinking retail banking
The establishment of the new China desk of Citi Commercial Bank in Singapore followed the bank’s announcement in April that it would exit the retail banking business in 13 markets. Many of these markets are in the Asia Pacific region, including Australia, China, India, and Indonesia.
Jane Fraser, Citi’s chief executive, told CNBC in April that the bank is “doubling” in areas such as institutional banking worldwide and wealth management in the US and Asia. Commercial banking is part of Citi’s institutional business.
Within Asia, China’s “strong presence” in trade flows and business activity means the bank will expand its China desk in Singapore and create new ones in other markets, said Rajat Madhok, head of Citi Commercial Bank in Asia Pacific.
Citi Commercial Bank operates in 11 Asia Pacific markets, which contribute approximately one-third of the bank’s global commercial banking revenue.