Citibank plans to add more branches in Hong Kong and in mainland China as it expands further into the Asia region.
Jonathan Larsen, the US lender's newly appointed global retail banking head, said he would like to see the number of Citi branches in Hong Kong increase to 70 in the long run, up from 47 now. The bank has doubled its network in the city in the last two years.
Up to 97 per cent of standard services were now accessed through non-branch channels such as the internet, ATMs, or mobile phones, said Larsen. But branch expansion nonetheless remains an important strategy to expand the bank's business.
"The branches we opened over the past couple of years are completely different from the traditional style of branches where people line up in long queues to deposit or withdraw money at teller's counters," he said.
"Today, branches are an effective way to attract new affluent clients to open new accounts; apply for credit cards and have their applications approved and a card issued within one hour; as well as to have face-to-face services from relationship managers who give investment advice to help wealth management clients manage their money."
This mix of technology and human services represented the future of retail banking, said Larsen. "It is on this basis that we are expanding our branch network in Hong Kong, China and Asia as a whole."
The branch openings have boosted Citi's customer base by 27 per cent in the 12 months ended June this year, securities' trading accounts are up 20 per cent, and card issuance has risen 13 per cent.
The bank has nearly 700 branches in the 14 Asian markets it operates in, up from only about 100 a decade ago. Its Asia consumer banking business represents about a third of the global consumer bank turnover compared with about 8 per cent 10 years ago.
The bank's Asian operations contributed US$4 billion to group profits last year, with half coming from the consumer banking division.
"Asia is a very important region for our bank's retail banking business as this is the area likely to have the strongest growth worldwide," Larsen said in an exclusive interview with the South China Morning Post. "It is natural for us to be very focused on Asia along with other key emerging markets such as Latin America."
He said the bank would also like to expand retail banking in other emerging markets such as Eastern Europe.
Mainland high-net-worth clients visiting Hong Kong are target customers for Citibank so newer branches are in tourist hotspots such as Tsim Sha Tsui, Mong Kok, Causeway Bay, and Central. Citibank's trading hours also differ from rivals; branches are open until 7pm rather than the standard 5pm closing of most banks.
"A significant number of customers opened new accounts during the extended opening hours between 5pm and 7pm - and indeed up to 11pm in selective branches. Flexible banking hours help meet the needs of the many clients for whom banking during normal office hours is not convenient," Larsen said.
The bank's branch expansion policies will vary among markets in Asia in line with regulatory differences. The policies in Hong Kong and Singapore allow more freedom, while India, Malaysia, and Thailand have more restrictions on branch locations. On the mainland, branch approval for foreign banks is also subject to heavy regulation.