Citigroup Inc. is reportedly facing delays in its plan to establish a fully-owned securities business in China because the bank needs additional time to comply with the country's stringent data laws.
Citigroup to Start China Securities Business
People familiar with the matter told Bloomberg that the New York-based banking giant had initially estimated its China securities business license to be in place by mid-2023.
However, the current scenario suggests that the commencement may be deferred around the end of 2024. This postponement is linked to the complexities of ensuring compliance with China's data regulations, a crucial aspect of the licensing process.
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Citigroup Sells Onshore Consumer Wealth Portfolio
The delay in Citigroup's securities business plan follows the recent announcement of its decision to sell its onshore consumer wealth portfolio in China, including clients, assets under management (AUM), and deposits, to HSBC Bank China.
This move, unveiled on October 29, marked a significant step in the wind-down of Citigroup's consumer banking operations in China, a decision initially disclosed in December 2022 as part of the bank's global strategy refresh.
The transaction involves the transfer of total deposits and investment AUMs amounting to approximately $3.6 billion. While the specific terms of the deal remain undisclosed, the closure is anticipated in the first half of 2024.
HSBC Bank China is set to extend offers to employees supporting Citi's local consumer wealth business in China. Citi established its presence in China in 1902 and distinguished itself among the initial global banks to locally incorporate in 2007.
Currently, Citigroup caters to 70% of Fortune 500 companies in the market, over 300 prominent local enterprises, and numerous emerging new companies in the economy sector.
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