Citgroup announced today that China had approved its plans to issue credit cards in the country. That will make it the first U.S.-based bank to be able to issue credit cards under its own brand.
Citigroup said it plans to issue its first cards this year. The AP reports:
"Banks and card processing networks have long eyed the Chinese market as a potential source for growth, but regulators have been slow to open to foreign countries. Only the Bank of East Asia, based in Hong Kong, is currently able to issue credit cards in mainland China.
"While economic growth is slowing in China, its economy expanded by a 9.2 percent last year. Its growing middle class is a prime target for lenders.
"Citi would not yet say if the cards will carry a logo from Visa Inc. or MasterCard Inc. Both payment processing networks have been aiming to expand their reach into China and bolster their overseas business."
The Financial Times reports that Citi executives said the ability to issue cards in China is a "significant milestone" that gives them a "strong competitive edge." But the Times says the bank's limited presence in the country will make that hard.
"The bank, which saw about $8bn in revenues from its consumer operations in Asia in 2011 or about one-quarter of its total consumer revenues, has just 46 branches in China," reports The Financial Times.
CNN Money reports that the United States has been pushing for China to open its market to American companies through the World Trade Organization. General Motors, reports CNN, is the same situation Citi was before this decision.
"[GM] has the leading share of the rapidly-growing Chinese market for autos, which is now the largest in the world. But virtually all those sales are through various joint ventures that GM has with Chinese automakers," CNN reports.