Citibank Inc, the US banking conglomerate, says it has made strong progress in the southwestern city of Guiyang in Guizhou province, two years after it became the first foreign bank to open a branch there.

The company said that economic development in the province, where GDP per capita is among the country's lowest, is accelerating, as it is in many of China's western regions.

"We are very bullish on the economic development here. Guiyang has a high growth rate and this is one of the most important reasons we are here," it said in a statement.

Opened on Nov 12, 2010, its Guiyang branch conducts both corporate and retail business, and so far, its progress has "exceeded expectations" on all fronts.

Citigroup is considered one of the forerunners of foreign bank expansion into China's less-developed, but fast-growing, western regions.

Much of the local economic growth has come from central government incentives aimed particularly at attracting manufacturing companies inland to benefit from lower labor costs.

In the first half of the year, fixed-asset investment, one of the main drivers of China's economic growth, rose 31.2 percent in western provinces, compared to 22.9 percent in eastern provinces.

During the same period, GDP in most western provinces grew by more than 10 percent, against a national average growth of 7.8 percent. Guizhou's GDP grew 14 percent in the first half of the year.

Citibank isn't the only major overseas financial institution to take advantage of this rapid growth.

In June HSBC Holdings Plc launched its second rural bank in Chongqing, which has the highest number of foreign banks in the western region.

South Korea's Woori Bank, the flagship unit of Woori Finance Holdings Co, set up its first branch in Chengdu, capital of Sichuan, in January, and in April Singaporean lender DBS Group Holdings also established a foothold in western area, setting up a branch in Chongqing.

Experts believe more foreign banks will come to Guizhou province, as this rapid economic development continues.

In September, it was revealed that total deposits in Guizhou's financial institutions topped 1 trillion yuan ($160 billion) for the first time.

Zhou Daoxu, head of Guizhou's finance office, said that efforts will continue to attract more financial institutions.

"We will strengthen the finance industry and let it drive the growth of other industries," said Zhou.

Citigroup said its focus will continue to be providing a range of financial services - including cash management, syndicated loans, trade financing and foreign exchange trading, with more planned - to multinational companies, as they expand from eastern coastal to western regions.

Contact the writer at gaochagnxin@chinadaily.com.cn