(China) – US Citibank has started offering foreign currency products to Chinese customers in a first step in attacking the huge local currency business.Citibank won the race amongst other foreign banks to be first in tapping into China’s US$82 billion personal foreign currency savings market.
The longer-term play for most banks in the China market is the US$1.5 trillion (equivalent) in domestic yuan currency savings.
Hong Kong’s Bank of East Asia has also received approval to offer foreign currency services including deposit taking, lending and credit card issuance.
Foreign banks are forecast to capture up to 15 percent of the foreign exchange deposits market over the next 5-10 years and 20-30 percent of the foreign exchange loan business (US$81 billion as at the end of 2001).