Citigroup's China expansion plans face delays over pending US Fed clearance

Citigroup’s plans to expand in China have encountered obstacles with US regulators, as the bank has not yet secured a clearance letter from the US Federal Reserve that verifies its regulatory status — a requirement from Chinese authorities, Bloomberg reported. The news report noted that Citigroup was told to address its data management issues in the US after being fined $136 million in July. The penalty has added complications in meeting China’s licensing requirements. Despite these challenges, the New York-based bank remains engaged in discussions with Chinese regulators about setting up the new firm, with no intention to withdraw its application, Bloomberg reported, citing sources familiar with the situation. The circumstances remain fluid and may change, the report said. Citigroup reported higher profits for the second quarter this year, driven by a 60 per cent surge in investment banking revenue and growth in its services division. The bank’s net income rose to $3.2 billion, or $1.52 per share, for the quarter ending June 30, compared to $2.9 billion, or $1.33 per share, in the same period the previous year.