'Worst is over', Citi official says as bank looks to increase staff in Hong Kong
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'Worst is over', Citi official says as bank looks to increase staff in Hong Kong

A Citibank branch in Central. Photo: Nora Tam
A Citibank branch in Central. Photo: Nora Tam

Citigroup, the biggest foreign lender in Hong Kong, will increase staff at its commercial banking unit in the city by 100 to tap growing opportunities in the Greater Bay Area, according to a senior executive.

The increase in headcount is needed after the bank recorded 11% year-on-year growth in new corporate clients in the first quarter of this year, said Anson Kwok, head of the commercial bank at Citigroup Hong Kong. The number of new corporate clients in April returned to pre-Covid-19 levels last seen in 2019, he added.

"The worst is over and the outlook for 2023 is positive," Kwok said last week. "We have seen that many companies have new business expansion plans for the post-Covid-19 era, after the borders of Hong Kong were fully reopened earlier this year."

The strong growth in new corporate clients suggests Hong Kong has returned to normal after three years of interruption by the coronavirus pandemic. The city started easing its Covid-19 restrictions in September before fully reopening its border in January this year. The mask mandate, the last such restriction, was lifted on March 1.

Kwok said business had, in fact, started to pick up in the later parts of last year, when the city started removing restrictions and China started to open up in November. In 2022 as a whole, Citi's commercial bank signed up 40% more new corporate clients in Hong Kong compared with the previous year.

"We are confident that we are on track to meet our five-year growth target, to double our revenue from commercial banking in the period from 2021 to 2026," Kwok said.

The rapid development of the Greater Bay Area has emerged as a growth engine for the bank, Kwok said. About 39% of Citigroup's new commercial clients in Hong Kong came from the development zone, while 15% were from other parts of mainland China, with the rest coming from other local and Asian companies.

"The Greater Bay Area is definitely a focus of expansion in the coming years," Kwok said. Growth in the region will create "big business opportunities", he added.

Citi's commercial bank held a Greater Bay Area summit in April in Hong Kong and Shenzhen, which was attended by more than 300 corporate clients. The bank also offers a talent training programme in the development zone, with more than 200 Hong Kong and mainland university students taking part this year. The bestperforming participants will have the opportunity to do internships in Hong Kong and the mainland.

Citigroup has also set up a special team to serve clients' subsidiaries and has successfully got new corporate clients that are the Hong Kong subsidiaries of companies headquartered in the United States, Britain and South Korea.

Another source of growth are new clients from the new economy, biotechnology, cloud storage, education and artificial intelligence sectors, which have a great demand for services such as foreign exchange, corporate loans and capital market fundraising, Kwok said.

"Many companies delayed their listing plans last year due to the uncertainties of the market," he said. "However, we believe the capital market will resume activity again in the rest of this year, after the stock exchange introduced new listing reforms last month."

Bourse operator Hong Kong Exchanges and Clearing (HKEX) on Friday added Chapter 18C to its listing rules, allowing companies with at least HK$10 billion (US$1.3 billion) in valuation to sell shares through initial public offerings (IPOs), even if they have yet to earn a single dollar in sales. The threshold will be reduced to HK$6 billion if they have at least HK$250 million in sales in the financial year before their IPO.

HKEX's previous rules, among the most stringent in the world, required at least HK$80 million in combined profits in the three years preceding a new listing.

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