Citigroup's efforts to expand in China have encountered challenges due to U.S. regulatory actions, as reported by Bloomberg News on Sunday. The Federal Reserve has imposed a penalty on the bank related to its data management and risk control practices.
As a result, Citigroup is experiencing delays in establishing a standalone securities firm, as it has not yet obtained a clearance letter from the U.S. Federal Reserve that confirms its regulatory compliance, a requirement set by Chinese authorities.
In July, the bank was directed to address its data management issues domestically, leading to a total of $136 million in fines. These penalties complicate the bank's ability to satisfy China's licensing requirements.
Despite these hurdles, Citigroup is actively engaging with China's securities regulator regarding the establishment of its business and has no intention of withdrawing its application. Sources familiar with the situation indicate that developments are ongoing and may evolve.
Citigroup has chosen not to comment on its licensing process in China but has reiterated its commitment to serving its clients in the region.