Citi not enthused by slow-growing European retail banking

BERLIN: Citigroup chief executive officer Charles Prince, head of the biggest US bank, said he doesn���t have any plans to expand in Europe. ���Retail banking in Europe is growing at a much slower pace��� than in Asian countries such as China, Prince said in an interview on Sunday in Davos, Switzerland, where he was attending the annual meeting of the World Economic Forum. ���That���s why I am not so much interested in the European retail banking market.���

Mr Prince struggled to keep costs under control in 2006 while making investments he said Citigroup needed to spur growth. It���s planning to cut more than $1 billion in expenses this year, a person with direct knowledge of the matter said this week. Citigroup this month stepped up expansion of its distribution in China and in December said it plans to more than double its branch network in Singapore.

���I expect a sharp growth in the Asian retail banking market, especially in China,��� said Mr Prince. Consolidation in German banking may also continue if the government sells some of its state-owned banks, he said.

���It depends on the question if the Landesbanken are for sale or not,��� according to Mr Prince. ���If yes, we could see a breaking up of the German three-pillar banking system.���

Germany���s pillar structure shields state-owned lenders, which control about 43% of commercial lending, from takeovers, hindering mergers and takeovers among the country���s banks.