Citi Turns 200: Client relationship lasts over a century
August 31, 2012 09:00 AM
In celebration of Citigroup's 200th Anniversary, we are sharing stories from our rich history here on this blog. The 24th installation below covers how National City Bank nurtured a client relationship to last over a century. Read the 23rd installment on how National City Bank became the leading bank in the New York metropolitan area and overseas here.
Client relationship lasts over a century
The bank's first customer in Guangzhou flourishes today as a multinational with the support of Citi's global network
When the International Banking Corporation, later acquired by National City Bank, opened a branch in the southern Chinese city of Canton (present-day Guangzhou) in 1906, its first client was a trading firm called Li & Fung. At a time when China's foreign trade was largely monopolized by British firms, Li & Fung stood out as the first export firm wholly owned by Chinese. It was founded in 1906 by Fung Pak-liu, a Hong Kong-educated schoolteacher who had recently returned to Guangzhou, and Li To-ming, a Chinese merchant whose family owned a porcelain shop.
Business with the United States flourished as Li & Fung's product range expanded from porcelain to include bamboo, rattan, fireworks, jade, and ivory. The company relocated to Hong Kong in 1937 and became the British colony's top garment exporter. In 1973, it went public. Its new issue was oversubscribed 113 times, a record held by the company for 14 years.
One of the sons of Fung Pak-liu was Fung Hon-chu, who took over as manager in 1937. At a celebration marking the firm's 75th anniversary, he spoke very positively of the firm's relationship with Citibank. The bank, he said, had supported the company in various ways over the years, with services including trade finance, deposits, foreign exchange, and letters of credit. Citibank "covers all the major cities of the world. ... With its support, we have been able to meet our customers' needs and ensure our own financial liquidity."
As Li & Fung managing director, Fung Hon-chu appointed retired Citibanker Ho Chik-kong as a manager in 1969. The former senior officer at First National City Bank's Guangzhou branch had known Fung's father, one of the firm's two co-founders. In 1976, Ho was named as a director of a finance and investment subsidiary of Li & Fung, and later he became group managing director.
By 2011, Li & Fung was a multinational group employing close to 37,000 people in 40 economies. Management had passed to the third generation of the Fung family, the Harvard-educated brothers Victor and William Fung. The company remains one of Citi's most longstanding clients outside the United States.
As Li & Fung and Citi commemorated a century of partnership, Citi's Hong Kong country officer and Asia Pacific chairman Shengman Zhang said that the two companies enjoyed a "special relationship" that was strong and flexible enough to reach across time and generations. "Such strong ties can only exist where there is trust," Zhang said.