Citigroup, HSBC, two others launch China units

(Rewrites first two paragraphs; adds Citigroup's card plans in final paragraph)

By George Chen

SHANGHAI, April 2 (Reuters) - Four foreign banks, including Citigroup Inc. (C.N) and HSBC Holdings Plc. (HSBA.L), kicked off domestically incorporated Chinese units on Monday, becoming the first foreign banks able to tap China's $2 trillion in personal savings.

The other two are Asia-focused Standard Chartered Plc. (STAN.L)(2888.HK) and Hong Kong's fifth-largest lender, Bank of East Asia (0023.HK), while more than 10 overseas lenders are still awaiting Beijing's approval to launch Chinese subsidiaries.

The four approved banks are free to take deposits of any size from any Chinese customers after local incorporation, although Citigroup, HSBC (0005.HK) and Standard Chartered said they would continue to focus on large accounts, due mainly to the limited size of their branch networks in China.

But smaller Bank of East Asia said it would welcome new accounts with deposits as small as 1 yuan (13 U.S. cents).

Only foreign banks that are incorporated in China are allowed to operate accounts with less than 1 million yuan for Chinese individuals.

Bank of East Asia currently operates only 31 outlets in 13 cities, but it plans to expand its network to 100 outlets by 2010 and add 1,000 new employees this year.

"We don't have any specific requirement (for deposits) as we want to be a real local bank from now on," said Chan Kay-cheung, deputy chief executive of Bank of East Asia.

Chan expected the bank's business in China to contribute 35 percent of the group's net profit by 2010, up from 15 percent last year, as it takes on more customers.

Citibank (China) Co. Chairman Richard Stanley, however, said his bank still lacked enough staff and branches to offer services to small savers on a par with the big state-run banks.

Stanley didn't specify any minimum target for deposits, saying the bank was still working on final approval from Chinese regulators, but indicated that Citigroup would stick with its emphasis on wealthy clients.

HSBC took a similar stance.

PREMIUM SERVICES

"We will continue to focus on our premium services ... Our market positioning will be unchanged after local incorporation," said Catherine Fok, head of personal financial services at HSBC Bank (China) Co.