Citigroup is reportedly looking to set up an investment banking unit in China after the country’s financial markets were opened up fully for foreign banks this year.

In recent months, the bank’s executives in Asia held negotiations with New York executives to set up a China securities business, Bloomberg reported.

Initially, the American lender was only planning to boost its brokerage and futures trading business and its custodian services.

Last year, due to concerns regarding the costs of hiring a minimum of 35 people, the bank’s local executives decided against setting up an investment bank in the country.

The latest plan comes after a new technology board was introduced in Shanghai and the rules for selling shares to the public were also eased.

Citigroup, however, will require more capital to set up the investment bank, the report added.

Since the bank has been strong-armed by US regulators over its risk controls, it may not receive the US Federal Reserve’s nod to beef up its China expansion.

Earlier this month, the Office of the Comptroller of the Currency (OCC) fined Citigroup $400m over risk management deficiencies.

Additionally, the OCC ordered the bank to seek its approval before taking up “significant new acquisitions” and for “hedging, market making and securitization transactions.”

Citigroup already has a local presence in China with outlets across 12 cities, with CNY178bn ($27bn) in assets and $1bn revenue from Chinese clients, according to its 2019 annual report.

Other US banks such as JPMorgan Chase and Goldman Sachs Group have already secured the green light to set up a Chinese securities business, Bloomberg said.