Citigroup Backs China Expansion Without Share Sale, Asian Chief Bird Says

Citigroup Inc. can generate enough capital from its Asian business to fuel expansion in China without selling shares in the country, according to the company’s top executive in the region.

“We have the ability to invest today at a pace exceeding that of any time in our history,” Stephen Bird, chief executive officer of Citigroup Asia, said at a news briefing in Shanghai today. “We actually don’t need to raise any capital from here in Shanghai.”

Citigroup, whose Asian unit earned $15 billion on revenue of $45 billion over the past three years, will continue to own all of its China operations, Bird said. The U.S.’s third-largest lender may sell as much as $21 billion of debt this year, up from an earlier target of $15 billion, Treasurer Eric Aboaf said in a July 22 interview.

HSBC Holdings Plc, Standard Chartered Plc and Bank of East Asia Ltd. are among foreign banks that have expressed interest in a Shanghai listing as China prepares to open the world’s largest market for stock sales to foreign firms. HSBC said in June that it will raise a “significant amount” in the city.

China opened its banking industry to overseas companies in December 2006, sparking a rush among foreign lenders to compete for the nation’s corporate and household savings, which reached $7.6 trillion in July. China overtook Japan as the world’s second-biggest economy in the second quarter.

Citigroup, which is 18 percent owned by the U.S. government, posted two straight annual losses in 2008 and 2009 totaling $29 billion.

The U.S. lender, which opened its 29th branch on the mainland today, plans to add 10 more outlets by the end of the year and will continue to expand its network, according to China CEO Andrew Au.

Citigroup is looking for a local partner for setting up a securities underwriting venture in China, Bird said. Goldman Sachs Group Inc., UBS AG, Deutsche Bank AG and Credit Suisse Group AG are among foreign firms that have such ventures.

--Luo Jun. Editors: Russell Ward, Philip Lagerkranser

To contact Bloomberg News staff of this story: Luo Jun in Shanghai at +8621-6104-7021 or jluo6@bloomberg.net

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