Citi Plans China Boost While Cutting 20,000 Jobs
(13 January 2024 - Global) Citigroup plans to deepen its involvement in China’s financial markets with the launch of an investment banking unit in the country, even as rivals grow more cautious there.
The large US bank intends to launch the wholly owned China-based unit by the end of the year, according to the Financial Times. The banking unit would expand Citi’s business in China, which already includes corporate lending and other banking services.
The move comes as other large US banks are becoming more tentative about operations in China. Goldman Sachs chief executive David Solomon, speaking at the Financial Times’ Global Banking Summit in November, said that his bank was reducing its activities in the country because of growing tensions between Washington and Beijing.
Five years ago, Goldman was executing a strategy that was more “growth at all costs in China”, Solomon said. “Today, it’s a more conservative approach and we’ve probably pared back some of our financial resources there, simply because there’s more uncertainty.”
Western banks are struggling to gain traction in China as geopolitical tensions and the country’s slowing economy undermine efforts to tap into one of the world’s largest markets for initial public offerings.
Official data shows foreign investment banks worked on three out of 313 IPOs in China last year.
The planned launch comes as Citigroup said it would cut 20,000 jobs over the next two years, acknowledging a "clearly disappointing" quarter marred by one-off charges that resulted in a $1.8 billion loss.
The lender will reduce its global workforce of 239,000 by 20,000 - or roughly 8 percent of staff - through 2026, including layoffs from the sweeping reorganization, Chief Financial Officer Mark Mason told reporters.
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