【Text by Yushan Guanjin Studio】

Recently, China UnionPay announced that it has terminated the membership qualification of Citibank (China) Limited, without disclosing the specific reasons. This move means that Citibank China will no longer be able to process RMB payment transactions through the UnionPay network, and the usage scope of its credit cards and some payment tools issued in China will be directly restricted.

According to public information, with the withdrawal of Citibank's UnionPay qualification, the number of foreign banks with UnionPay membership in China decreased from 9 to 8. The foreign banks currently retaining this qualification include HSBC, Standard Chartered, Bank of East Asia, DBS, Mizuho, Deutsche Bank, Mitsubishi UFJ and Hang Seng Bank. The UnionPay membership qualification serves as an important channel for foreign financial institutions to access China's local payment and settlement system. Changes in this qualification often attract market attention on the strategic layout and regulatory compliance of the relevant institutions. The termination of Citibank China's UnionPay qualification is not an isolated event, but should be viewed against the background of the bank's continuous reduction of personal financial services in China in recent years.

Termination of UnionPay Qualification and Citibank China's Business Adjustment

China UnionPay recently announced the termination of the membership qualification of Citibank (China), which means the bank will exit the UnionPay payment network. UnionPay did not explain the specific reasons in the announcement, only stating that the related adjustments took effect upon release. This move led to the fact that the UnionPay cards previously issued by Citibank China can no longer be used in the domestic acceptance network, and transactions and settlement services conducted through the UnionPay system by individual and corporate customers will also be terminated simultaneously.

This exit further reduces the number of foreign banks in China with UnionPay membership qualifications. Currently, the eight foreign banks retaining this qualification include HSBC, Standard Chartered, Bank of East Asia, DBS, Mizuho, Deutsche Bank, Mitsubishi UFJ and Hang Seng Bank. The UnionPay membership qualification is a basic condition for foreign banks to access China's local card processing and settlement market. Losing this qualification means that Citibank China's service capability in the retail payment sector is significantly restricted.

It is worth noting that there have been personnel changes in the senior management of Citibank China recently. According to Tianyancha information, on August 15, Citibank (China) Limited underwent a business change, with the former chairman Lu Weiming (LO, WAI MING STEVEN) stepping down and being succeeded by SAN AVELINE PAU LEN. Earlier in July, the legal representative of the company was changed from Yang Changhao to ZHANG WENJIE, and Nadir Sarela also no longer served as a director. Whether the leadership reshuffle is related to the adjustment of business qualifications remains unknown at present, and there is no official statement yet.

Citibank became one of the first foreign institutions to establish a local legal bank in China in April 2007, and was once seen as an important milestone in its deepening strategy for the Chinese market. However, with the global restructuring of personal banking business, Citibank has clearly stated since April 2021 that it will gradually withdraw from personal banking businesses in 14 markets, including mainland China, focusing resources on institutional clients and wealth management areas. The termination of the UnionPay qualification can be seen as one of the specific steps of this global strategy in China.

Background and Process of Strategic Contraction and Business Transfer

The termination of Citibank China's UnionPay qualification is not an abrupt action, but the result of its systematic withdrawal from personal banking business in China in recent years. In April 2021, Citibank Group announced a strategic restructuring of its global personal banking business, planning to gradually exit personal banking in 14 markets, including mainland China, focusing resources on institutional clients and wealth management areas.

Subsequently, a series of business contraction measures were implemented. In October 2023, Citibank announced that it would sell its personal banking wealth management business in mainland China to HSBC (China) Limited, marking the beginning of the substantive divestiture of its retail financial business. This transaction was completed on June 11, 2024, with the transfer of related customers and assets.

In January 2024, Citibank China further announced that starting from May 6, 2024, it would stop the transaction function of its personal credit cards, making it impossible for customers to use the bank's credit cards for consumption payments, and related rights and services would also be gradually terminated. This move is directly related to the withdrawal from the UnionPay network - the interruption of the credit card settlement channel makes such business difficult to sustain.

Additionally, the cancellation of insurance intermediary qualifications also shows Citibank China's complete withdrawal from retail business. In May 2024, the Shanghai Regulatory Bureau of the China Banking and Insurance Regulatory Commission announced that it had legally revoked the "Insurance Intermediary License" of Citibank (China), meaning the bank no longer has the qualification to act as an agent for selling insurance products.

This series of business adjustments shows that Citibank is completely reshaping its operational focus in the Chinese market: from covering both corporate and personal business in the past to focusing on corporate finance and capital market services. Personal customer-related businesses, corresponding licenses, and system permissions are being orderly disposed of or terminated. From a global perspective, these actions align with Citibank Group's overall strategic direction, which is to reduce retail business operations, lower operational complexity, and concentrate resources on areas where it has competitive advantages. As an important part of its global network, the Chinese market is entering a new phase of structural adjustment.

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Original: https://www.toutiao.com/article/7546496345360646706/

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