Western credit cards finally invade China
Citigroup, Inc. has become the first western bank and the second foreign bank permitted to issue its own credit card brand in China. It is the world’s largest issuer of credit cards.
Stephen Bird, Chief Executive Officer of Citi Asia Pacific, said the approval was a milestone in the bank’s operations in China. The approval from the China Banking Regulatory Commission follows four years after Hong Kong’s Bank of East Asia became the first bank from outside the mainland to issue credit cards.
The move will expand Citi’s presence on the mainland but not significantly. Citi has just 46 branches in China, a factor that could limit the growth of its credit card operations.
Other analysts, however, feel that a World Trade Organization probe into the legality of Chinese rules on foreign companies issuing credit cards was a major reason Citigroup was given permission to issue its own credit card brand.
China is being cited for its practice of requiring foreign banks to “co-brand” with a Chinese financial institution to issue credit cards in renminbi and to make payments through China Union Pay Data Company, a card-processing company.
China’s card-based transactions grew by over 50% to US$1.6 trillion in 2010, according to the People’s Bank of China, the central bank.
Based in New York, Citigroup operates the world's largest financial services network that includes140 countries and some16,000 offices. It had a net income of US$10.6 billion in 2010 and is one of the “Big Four” banks in the USA.
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Tags: Citigroup, Inc., Stephen Bird, Chief Executive Officer, Citi Asia Pacific
