Citigroup's China Expansion Delayed by Pending US Fed Clearance

27 Sep, 2024

Citigroup's China Expansion Delayed by Pending US Fed Clearance

Citigroup’s plans for expansion in China are currently delayed due to a lack of approval from US regulators. The bank has yet to obtain the crucial clearance letter from the US Federal Reserve, which Chinese authorities require to confirm Citigroup's regulatory status. Compounding these challenges, the bank recently faced a $136 million fine related to data management issues, complicating its ability to meet China’s licensing requirements.

Nevertheless, Citigroup remains committed to establishing a new firm in China and continues discussions with Chinese regulators, showing no intention to withdraw its application.In terms of financial performance, Citigroup reported stronger profits for the second quarter of this year, fueled by a significant 60% increase in investment banking revenue. The bank's net income rose to $3.2 billion, translating to $1.52 per share, compared to $2.9 billion or $1.33 per share during the same period last year.

Additionally, the bank’s revenue reached $20.1 billion, marking a 4% year-on-year growth, which was aided by a $400 million gain from converting and partially selling Visa stock. Despite positive results, Citigroup plans to reduce its workforce by 20,000 over the next two years as part of its ongoing restructuring initiatives.