By Selena Li
HONG KONG, Sept 4 (Reuters) - Citigroup expects to get regulatory approval for its wholly-owned China brokerage business as soon as this month and plans to add several dozen staff at the unit over the next few months, said two people with knowledge of the matter.
The long-awaited final Chinese regulatory approval for the business could be granted around the time of Chinese President Xi Jinping's planned visit to Washington to meet with U.S. President Donald Trump in late September, the sources
said.
The expected regulatory approval for the business as soon as this month has not been reported previously.
Citi declined to comment.
The U.S. bank, which offers corporate, institutional and other banking services in China, applied for a wholly-owned mainland Chinese brokerage unit licence in late 2021 as part of its push to ramp up its presence in the world's second-largest economy.
Citi, which has been hiring for the business over the last couple of years in preparation for the licence, aims to roughly double the headcount to around 100 people by the end of this year, said the first source.
The China expansion would see Citi competing with already licensed Wall Street rivals including JPMorgan, Goldman Sachs and Morgan Stanley for a share of growing and increasingly profitable onshore securities trading and underwriting deals.
The expected launch of Citi's brokerage business comes at a time when China is seeing a growing list of technology and other companies tapping domestic equity markets for fundraising and attracting increased fund flows into the stock markets.
Despite intense Sino-U.S. geopolitical tensions in recent years, Beijing has been expanding Wall Street firms' access to its financial sector worth trillions of dollars as it looks to attract more capital inflows.
The New York-headquartered bank's China hiring push will see it adding people from senior front-office bankers to support staff and will be done via a combination of internal transfers and external hires, the sources said.
They declined to be named as the expansion plans are not public.
For the China brokerage unit, Citi plans to relocate some of its bankers from Hong Kong and other markets in Asia, as well as moving some of its existing mainland staff to the new business, the first source added.
COMPETITIVE MARKET
In 2025, profits at the wholly-owned China securities unit of Goldman Sachs nearly tripled to 1.46 billion yuan ($217.39 million), while JPMorgan's almost quadrupled to 984 million yuan, as per their latest China annual reports.
Morgan Stanley's profit soared sevenfold to 138 million yuan last year, its annual report showed, as the U.S. banks benefit from surging securities trading revenue primarily from institutional clients.
Citi's new China business unit is seeking a regulatory nod to conduct A-share brokerage, underwriting, research and principal trading businesses in the onshore market, according to the sources.
Those offerings would complement the bank's existing offshore-focused China investment banking team that supports domestic companies' financing activities in overseas markets, the first source added.
The bank plans to lean on its sizeable onshore corporate and commercial banking client base, which it already serves in areas such as foreign exchange, cash management and trade finance, to win A-share equity and M&A mandates, the people said.
For the new unit, Citi will focus on sectors including technology, healthcare, consumer and financial institutions, targeting China's established corporate "champions" as well as emerging players including AI and chip companies.
Citi this week announced a 25% headcount increase across South Africa, Europe and Asia to serve its North Asian clients' outbound banking needs, including those from mainland China.
In addition to the Wall Street rivals, Citi would be competing with the dominant Chinese brokerages for its planned offering. Some foreign financial firms have exited the country in the recent past due to the hyper-competitive business environment.
Reuters reported last month that asset manager Fidelity International was planning to wind down a China fund management unit, which followed Schroders' decision to transfer its onshore team and products to peer Neuberger Berman.
The planned China expansion comes against the backdrop of Citi CEO Jane Fraser, who was the sole female global banking chief accompanying Trump on his May visit to Beijing, pushing for stronger profitability targets for the next two years.
($1 = 6.7160 Chinese yuan renminbi)
(Reporting by Selena Li; Editing by Sumeet Chatterjee and Jamie Freed)
