Michael Corbat says Citi “obeys local laws” and is “committed to Hong Kong”

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Michael Corbat says Citi “obeys local laws” and is “committed to Hong Kong”

Michael Corbat has said that Citi will “obey local laws” in Hong Kong and is “committed” to its business in the city. The chief executive, speaking after announcing Citi’s second quarter results, was responding to an analyst question about how Hong Kong’s current turmoil might affect his bank’s Asian operations.

Corbat acknowledged the “significant penalties” in terms of China’s “sovereignty” that Citi must be “mindful” of under the new security law that China has imposed on Hong Kong.

Citi makes more revenue from Asia than any other US bank. Despite Covid-19 and the Hong Kong crisis, the bank’s Asian revenues inched up 2% quarter-on-quarter in Q2 to $4.09bn. But unlike Asia-focused HSBC and Standard Chartered Citi has avoided taking sides over the controversial security law. Corbat will be hoping that his non-inflammatory reply to the analyst will satisfy both Beijing and Washington as Citi tries to plot a safe path for itself amid rising US-China tensions.  

Citi has significant expansion plans in China, where it is setting up a wholly owned joint venture and has recently won some high-profile business, including helping Alibaba launch a secondary listing. But alongside other banks, Citi faces the threat of potential sanctions from a new US law that would penalise Chinese and Hong Kong officials involved in imposing the national security legislation. Moreover, China may in turn retaliate against this US move by hampering the growth ambitions of American banks.

Perhaps with this in mind, Corbat described the political situation as “complex” because of the “interaction between China and Hong Kong”. “I think as we look at the region, you can't just look at Hong Kong. I think you've got to take a bit of a broader view,” said Corbat.

He highlighted the fact that Hong Kong remains Citi’s “Asian hub” and the bank is used to operating in “complex environments”. “…we have found both the Hong Kong government and the HKMA and others very supportive of our business and our approach, and at the same time, we have I think received the same support from China, and haven’t in any way kind of received restrictions or other things from them,” said Corbat, adding that the firm is “committed” to being in Hong Kong and is “monitoring things closely”. “We've been in Hong Kong a long time. It's an important place,” he said.

Photo by Manson Yim on Unsplash

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