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Hey guys - no way Citi assessed the political risk deeply. Stephen
Bird a very smart guy who I respect a great deal, but he has been
based in Hong Kong for a year and had been in Singapore and Tokyo for
the previous 8 years. Stephen would understand the need for risk
assesment and likely used normal suspects - celebrity firms,
information providers and functional experts but none can provide the
depth of information he likely should have to make these decisions. I
always get uncomfortable when Citi describes growth in terms of people
and branches rather than revenue.

Michael

Citigroup to Increase China Workforce to 12,000 in Three Years
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By Cathy Chan

Sept. 1 (Bloomberg) -- Citigroup Inc. plans to almost triple its
workforce in China to as many as 12,000 people in the next three
years, intensifying its rivalry withHSBC Holdings Plc in the world’s
fastest-growing major economy.

The New York-based bank will hire more in China than in any other
market in Asia-Pacific, Stephen Bird, Citigroup’s co-chief executive
officer for the region, said yesterday in an interview. Citigroup has
4,500 employees in China and 50,000 in Asia, according to spokesman
James Griffiths.

Citigroup CEO Vikram Pandit is raising his bet on China, where banks
extended a record $1.4 trillion of new loans last year. Unlike HSBC
and Standard Chartered Plc, Citigroup has no plans to sell shares in
China and will instead fund expansion with money generated in Asia,
Bird said on Aug. 25.

“China is one of Citi’s priority markets globally,” said Bird, 43. “We
have aggressive consumer banking expansion plans and want to open
branches as fast as regulators in China will let us.”

Citigroup has 29 outlets in the country and plans to add 10 more this
year. That will still leave it short of HSBC’s 102 outlets and the 59
operated by Standard Chartered.

Standard Chartered, the U.K. bank that gets more than three-quarters
of profit from Asia, has more than 4,000 employees at its China unit.
HSBC, Europe’s largest lender by market value, has more than 5,000.
Industrial & Commercial Bank of China Ltd. had 390,000 workers at the
end of 2009.

Consumer Banking

Bird said consumer and institutional banking will account for about 80
percent of new hiring in China. The remainder will mainly be for
technology support and data processing, he said.

China, which opened its banking industry to overseas companies in
December 2006, is luring foreign lenders scarred by the global
financial crisis that forced Citigroup into a $45 billion bailout.
HSBC is focusing on emerging markets like China following losses at
its U.S. unit.

Citigroup almost doubled profit in China to 1.3 billion yuan ($191
million) in 2008, on a 46 percent revenue increase. The company hasn’t
published 2009 earnings for the country, Griffiths said.

Asia was the largest contributor to Citigroup’s earnings in 2008 and
2009, a period during which it lost $29.3 billion. Citigroup recorded
a first-half profit of $2.5 billion for the region on $7.26 billion of
revenue.

The bank is also expanding in Taiwan and Hong Kong, where it has 66
and 41 branches respectively, Bird said.

“Just a couple of years ago we were under 50 branches in Greater China
and in the next six months we should hit the 150 mark,” he said.

To contact the reporter on this story: Cathy Chan in Hong Kong atkchan14@bloomberg.net

Last Updated: August 31, 2010 12:01 ED