Citigroup Inc., the U.S. lender with more than 200 million clients, said the country's planned changes to the financial-services industry will make the largest banks bigger.
“They will make it tougher for smaller competitors and the big are going to get bigger,” Citigroup Chairman Dick Parsons, 62, said in an interview at the Fortune Global Forum in Cape Town today. The changes will lead to a “denser regulatory environment” and may not create any “material impediments” to Citigroup's growth strategy, he said.
U.S. President Barack Obama praised lawmakers last week for passing what he described as the “toughest financial reforms” since the Great Depression. The broadest changes affecting banks will regulate the $615 trillion over-the-counter derivatives market and mostly ban proprietary trading. In Europe, banks like Citigroup and Deutsche Bank AG may face stress tests, while those with U.K. operations may be taxed more.
Citigroup is focusing on expanding in emerging markets, and Africa's population of 1 billion creates a “sweet spot” for financial institutions, Parsons said. The lender plans to fund more transactions in Africa, targeting growth in industries from oil and gas to mining and telecommunications. Nigeria and Angola provide “important” opportunities, he said.
The Basel Committee of Banking and Supervision's likely proposals on capital rules for lenders may be “restrictive,” Parsons also said.
Citigroup, which received a $45 billion government bailout in 2008, is the world's ninth-largest bank by market value. It gained 4.2 percent to $3.94 in New York trading on June 25.