Citi issues first foreign credit card in China

Citi has become the first foreign bank in China to issue its own credit card without having to co-brand with a Chinese counterpart.

The first transactions were successfully conducted yesterday by Andrew Au, Citi’s China chief executive, and Simon Chow, China consumer banking head. They will be the first of many. China is widely expected to be the world’s biggest credit card market within the next decade, and is already seen as the second-largest consumer banking market in the world.

Despite more than a decade’s financial reform, its credit card business is still relatively immature due to the lack of an established payment infrastructure.

Even so, Citi’s management sees great opportunities in China’s credit card business as companies and individuals start to travel more internationally.

Despite China’s subdued economic outlook and the slowdown in deal activity, foreign banks are optimistic about earnings in the country and predict their annual revenue growth to reach 20% or more by 2015, PricewaterhouseCoopers found in a recent survey.

Citi won approval from the China Banking Regulatory Commission in February this year to issue cards to both commercial and retail customers.

Citi’s credit card will be accepted both in China and worldwide, available as a renminbi-denominated and a dollar-denominated card. China UnionPay is Citi’s partner for those cards used within the country, while MasterCard and Visa are international partners for the cards, the bank said in a statement yesterday.

The bank’s retail offering will include a variety of cards designed to meet customers’ needs, lifestyle and financial position. Citi is the biggest credit card issuer in Asia-Pacific with over 16 million card accounts.

 “The launch of our sole-branded cards business in China marks a significant development in our growing presence in China,” said Stephen Bird, Citi’s regional chief executive. “We were the first international bank to enter the retail banking market in China in 2002 and Citi is deeply committed to China, where we are pursuing growth across multiple areas. We are delighted to be once again breaking new ground in what is one of our most important markets globally.”