February 12, 2018, Citi bank branch in Singapore’s central business district.
Huiying Ore | Bloomberg | Getty Images
Singapore — The city’s commercial banking division has set up a Chinese office in Singapore to help “emerging” Chinese companies expand into urban states and Southeast Asia, the bank told CNBC.
Commercial banks serve growing midsize businesses with annual revenues of up to $ 1 billion. Many such companies in China are looking to expand overseas, although the large domestic market offers plenty of growth opportunities.
Singapore, the commercial and financial center of Southeast Asia, has also become a popular destination for Chinese companies of all sizes. Major Chinese companies operating in Singapore include tech giant Tencent, owner of TikTok ByteDance, and video streaming platform iQiyi.
Lin Hsiu-Yi, Head of ASEAN and Singapore for Commercial Banks, said:
ASEAN refers to the Association of Southeast Asian Nations, an economic zone made up of 10 countries in the region, including Indonesia, Singapore and Vietnam.
The new Chinese office is headed by banker Monachan, who previously focused on mid-sized businesses at Citi Commercial Bank’s offices in China.
The charm of Singapore
The decision of some Chinese tech companies to launch or expand their operations in Singapore over the past year also stems from the ongoing regulatory crackdown on Big Techs in China. Regulators target proprietary practices, data collection and use, and focus on how companies use algorithms to sell their products to consumers.
Citi said revenue from customer support activities and the flow from China to Singapore more than doubled last year compared to last year. Citi said the number of China-based clients that major U.S. banks cooperate with in Singapore increased 35% last year.
City cuts retail banking
The establishment of Citi Commercial Bank’s new Chinese office in Singapore follows the bank’s announcement that it plans to end retail banking in 13 markets in April. Many of these markets are located in the Asia-Pacific region, including Australia, China, India and Indonesia.
Citi CEO Jane Fraser told CNBC in April that banks are “doubling down” in areas such as global institutional banking and wealth management in the United States and Asia. Commercial banking is part of Citi’s institutional business.
In Asia, China’s “strong presence” in trade flows and business activities, the bank has expanded the China office from Singapore, and others, said Rajat Madhok, director of the Asia-Pacific commercial bank. This means that we are aiming to set up a new office in our market. ..
Citi Commercial Bank operates in 11 markets in the Asia-Pacific region and accounts for approximately one-third of the bank’s global commercial banking revenues.