Citigroup looks to expand in east Europe, including in Ukraine
Citigroup Inc., the world's biggest financial-services company, is looking to expand in eastern Europe to take advantage of faster growth in the region. The New York-based lender plans to grow by expanding its branch network in the Czech Republic, Hungary, Poland and Slovakia and may buy a bank in Ukraine, said Shirish Apte, Citigroup's head of corporate and investment banking in central and eastern Europe, Middle East and Africa. Citigroup, which entered the region 20 years ago, now wants to bring its retail business up to par with its corporate banking operations. The retail business „is growing rapidly in these markets starting from a low base,” Apte said. Eventually, the retail market share in developed markets is expected to be „equal to or in some cases slightly larger than corporate market share.” Annual growth in the region's eight new EU members averaged 8.2% in the second quarter compared with 2.6% in the 12 countries sharing the euro. The household lending market grew by 32% in Hungary and the Czech Republic last year, largely driven by demand for mortgages. That attracted companies including UniCredit SpA and Austria's Raiffeisen International Bank-Holding AG.
Citigroup has businesses in 10 east European countries. Its Polish unit is the fourth-biggest in the country. The bank is converting Poland's Bank Handlowy SA from a corporate lender to a retail operation. „In Poland the one advantage we have is that we made an acquisition in 2001 and as a result have a strong distribution network in the country,” Apte said. „In these markets, in order to acquire new customers, you need to have a strong distribution network for both corporate and retail businesses.” Ukraine, with a population of 48 million, is also attracting foreign banks as the $80 billion economy grows and the financial market opens up. Raiffeisen and France's BNP Paribas SA expanded into Ukraine. Citigroup set up business there in 1998, Apte said. „The Ukrainian market is developing very rapidly,” he said. „We are looking to expand our business there.” (Bloomberg)
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