Citi’s new initiative in China focuses on sustainability
Multinational bank Citi has launched a new programme to help the development of small and medium-sized firms in China, putting the emphasis on sustainability.
Citi is to provide preferential financing to its clients’ suppliers, including those SMEs integral to the clients’ overall operation. The financing will be given at cheaper-than-usual rates on a tiered basis, based on the supplier’s sustainability scores.
German chemical and consumer goods company Henkel is the first to enrol in Citi’s new scheme. Christoph Wenner, head of finance for Henkel in APAC, said the programme “will help improve sustainability across Henkel’s large supplier ecosystem in the region”. Its largest base in the Asia-Pacific region is located in China.
Sustainability has been a major focus of Citi’s development in China in recent years. The bank helped Chinese dairy giant Mengniu Group get a HK$2.3 billion ($295 million) green loan in Hong Kong in May 2021, the first of its kind in the Chinese market. The financing was used to improve Mengniu’s energy consumption efficiency and production of organic milk.
In 2021, Citi completed over $45 billion of sustainable financing for clients in the Asia-Pacific region, roughly a third of which was raised for clients in China.
Christine Lam, Citi China’s chief executive officer, said achieving carbon neutrality and lowering financing costs for SMEs was being prioritized through the policies of China’s government, which was also important for the wider Chinese economy. Citi has thus made continued efforts to back those with sustainable business models, she said.
- Citibank announced in April 2021 that it was closing its consumer branches in 13 countries, including the Chinese mainland and India, where its retail banking lacks scale. But the group said at the time it will further strengthen corporate banking and explore new business opportunities in the Chinese mainland.
Announcing the move, Christine Lam said: “Citi has been strongly committed to the Chinese mainland market. Our priority is on supporting all our clients as we transition our franchise towards further opportunities to grow Citi's institutional franchise in the mainland.
“We will continue to assist Chinese clients to expand globally and foreign companies to tap into the vast opportunities in the mainland in support of the mainland’s dual circulation strategy.
“We look forward to many more years of working with all our stakeholders in the mainland, serving local communities and playing an active role in supporting the mainland’s ongoing financial opening-up.”