Citigroup Inc. (NYSE:C) is reportedly expecting Chinese regulatory approval for its wholly owned mainland brokerage business as soon as September 2026. The bank applied for the licence in late 2021 and has spent the intervening years building out the business in preparation for approval. Citi now plans to roughly double the unit’s headcount to around 100 employees by the end of the year, using a combination of internal transfers and external hires.
The licence would allow Citi to conduct A-share brokerage, underwriting, research and principal trading in mainland China. The new operation would complement Citi’s existing China business, which already provides corporate, commercial and institutional banking services, including foreign exchange, cash management and trade finance. The bank intends to use this existing client base to pursue equity and M&A mandates, with a particular focus on technology, healthcare, consumer and financial companies, including AI and chip firms.
The opportunity is significant because China’s onshore securities market has become increasingly attractive. Reuters reported that profits at Goldman Sachs’ wholly owned China securities unit nearly tripled to 1.46 billion yuan in 2025, while JPMorgan’s profits almost quadrupled to 984 million yuan and Morgan Stanley’s rose sevenfold to 138 million yuan. These gains were supported by stronger securities trading activity, particularly among institutional clients.
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Citi Gains Another Avenue for Growth in China
The biggest positive for Citigroup Inc. is that the brokerage licence would give the bank a much broader presence in China’s domestic capital markets. Rather than relying primarily on its offshore China franchise, Citi would be able to participate directly in A-share trading, underwriting and other onshore securities activities. This could open up an additional source of fee and trading revenue while deepening the bank’s relationships with Chinese corporations.
Citi also has an important advantage that some newer entrants may lack: an established onshore corporate and commercial banking client base. Reuters reported that the bank plans to use relationships built through foreign exchange, cash management and trade finance to win equity and M&A mandates. This gives Citi the potential to cross-sell brokerage and investment-banking services to existing customers instead of building its client network entirely from scratch.
The performance of other Wall Street firms provides a particularly encouraging precedent. Goldman Sachs, JPMorgan and Morgan Stanley all recorded substantial increases in profits at their wholly owned Chinese securities operations in 2025. If Citi can capture even a modest share of the same market, the new business could eventually become a meaningful contributor to its investment-banking and markets franchise.
The timing could also prove favorable. Reuters noted that Chinese companies are increasingly tapping domestic equity markets for fundraising while fund flows into Chinese stocks have increased. Beijing has also continued opening its financial sector to foreign firms in an effort to attract capital. That creates a potentially attractive environment for Citi to establish itself in China’s capital markets.
More broadly, the move fits CEO Jane Fraser’s effort to improve Citi’s profitability over the next two years. Expanding into a growing market where Citi already has institutional relationships could provide another avenue for revenue diversification without requiring the bank to build an entirely new geographic franchise from the ground up.
A Lucrative Market that Won’t Be Easy to Crack
The biggest concern is competition. Citigroup Inc. would be entering a market where Goldman Sachs, JPMorgan and Morgan Stanley are already established and have demonstrated that the business can be profitable. At the same time, Citi will face China’s large domestic brokerages, which possess deeper local relationships and greater scale. Reuters described the Chinese brokerage environment as highly competitive, with some foreign financial firms recently reducing their presence because of difficult market conditions.
Citi’s relatively small initial operation is another limitation. A planned workforce of roughly 100 employees is modest compared with the scale of China’s securities industry. While the bank can leverage its existing corporate relationships, winning significant A-share trading and underwriting mandates will still require substantial investment in talent, technology, research and client coverage.
There is also a geopolitical risk that Citi cannot completely control. The expansion comes despite continuing tensions between the United States and China. Reuters previously reported that Citigroup Inc.’s China expansion had been delayed by U.S. regulatory issues, including concerns surrounding the bank’s data management and risk controls. Although the current Reuters report suggests the licence is now much closer to approval, the earlier delays illustrate how regulatory requirements on both sides can affect Citi’s China strategy.
The economics of the Chinese securities business are also not guaranteed to remain as strong as the recent results at rival firms suggest. Brokerage and underwriting revenues are closely tied to trading volumes, market valuations and corporate fundraising activity. A slowdown in Chinese equities or a weaker IPO/M&A environment could reduce the revenue opportunity just as Citi increases its investment in personnel and infrastructure.
Finally, Citigroup Inc. is not entering an uncontested market simply because China is opening its financial sector. Domestic brokers remain dominant, while other global banks already have years of experience operating within China’s regulatory and capital-markets framework. Citi will therefore need to spend aggressively enough to become competitive without allowing the expansion to undermine the profitability improvements Fraser is trying to achieve.
Conclusion
Citigroup Inc.’s expected China brokerage licence is more strategically positive than immediately transformative. The opportunity gives the bank direct access to China’s domestic securities market, strengthens its existing corporate franchise and provides another potential source of investment-banking, trading and underwriting revenue. The strong recent performance of Goldman Sachs, JPMorgan and Morgan Stanley’s Chinese securities businesses demonstrates that foreign banks can generate meaningful profits in the market.
However, Citi will be entering a fiercely competitive industry while still dealing with the regulatory and geopolitical complexities surrounding U.S.-China financial relations. The relatively small scale of its initial operation also means that the financial payoff is likely to build gradually rather than immediately.
Overall, the licence is a positive long-term development for Citi, particularly if the bank can successfully leverage its existing Chinese corporate relationships. But investors should view it as a potentially valuable growth option rather than a near-term game changer.
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This article is originally published at Insider Monkey.
