ASEAN KEY DESTINATIONS
Citibank plans to expand in Asean
Citibank is looking to invest heavily into its expansion in Asia and Asean, although it insists that it would be undertaken only organically.
"Across the board, we are investing in expansion in Asia as the size of the market in Asia is huge and growing in markets such as China, Japan, Korea (South), Indonesia, Thailand, Malaysia, Singapore, India and others," Shirish Apte, the chief executive of Citi Asia-Pacific, said in a recent interview with the Bangkok Post.
Mr. Apte, who was in Bangkok to inaugurate the new high-tech facilities of Citi, said that the bank had turned the corner from the woes it was experiencing in the aftermath of the 2008-09 financial crisis that crippled the global economy, and that Asia had now become an integral part of its growth strategy.
The Asia-Pacific region, for which he is responsible, includes large countries such as India and Indonesia, which the bank sees as having high potential. Other markets such as China, Taiwan, Japan and Korea are looked after by his co-CEO, Stephen Bird.
He says that the positive thing about Citi in the region has been that it is a very well-recognised brand and this is visible from the bank's performance during the first quarter of this year. The Asian operations of the bank reported a net profit of $1.4 billion against $4.5 billion booked for all of 2009.
He credits the improvement to the huge base of customers in the region, although Apte admits that the lack of branch networks in many of these countries does pose a hindrance.
"There are limitations on banking due to lack of branches, but we are taking opportunities if and when they are available to us to expand, such as the case of Singapore where we applied for branch network once they were available to us," he said.
Citing a similar condition in Thailand, he said that the bank's local branch has already applied for two more branches in Thailand under the financial sector master plan, which allows the opening of two branch networks per year and up to 20 branches by 2012.
As for the Asean market where the bank has been thriving, he said the current plans were to expand in key markets such as Malaysia, Indonesia and Vietnam. In Indonesia, he said that the bank plans to have 70-80 branches from the current 21 branches and that the approval process there was not complicated.
He said that the opening of more electronic banking services, coupled with the rising demand for financial services in markets such as India, Malaysia, Indonesia, Australia and Vietnam, is all music to the ears of the bank whose balance sheet exceeds the size of the Thai economy.
In markets such as India, Apte said his bank has found a niche market whereby it can compete with the formidable banks in their home turf such as ICICI Bank and State Bank of India.
"We currently have 44 branches in India, which by any means is small for a market of that size," he said, while stressing that the bank was in talks with the Reserve Bank of India to possibly expand the operations in the near future.