What are Britons doing patronizing a New York bank?

Question: What's the fifth-largest bank in Great Britain? Answer: New York's Citicorp.

The largest banking company in the world, with about $160 billion in assets, Citicorp is famous in banking circles for its aggressiveness. Here in London, Citicorp's expansionary moves have grabbed the headlines in the financial press several times in the past year.

London has long opened its doors to foreign banks. There are some 450 of them rattling about this city, often competing for the same business in a relatively unregulated atmosphere. Citicorp has been represented here since 1902.

But Citicorp (a bank holding company that owns Citibank and other subsidiaries) stands out because of its wide retail and commercial banking presence in Britain. It is not big enough to challenge such British banking giants as Barclays or National Westminster in terms of market share. But with its 2,500 employees and probably more than $10 billion in assets in the United Kingdom, it causes anxiety at the No. 3 and 4 among British banks, Lloyds and Midland.

``Our aspiration is to be a major player here -- whether we are fifth, sixth, or seventh,'' says Kent de M. Price, senior vice-president in charge of Citicorp's various operations in the U.K.

So far, Mr. Price noted in an interview here, the American ownership of Citicorp ``hasn't seemed to be an issue'' in this country. The government has recognized that for London to remain a world financial center, it must welcome foreign banks at least relatively warmly.

Mr. Price speaks of the ``liberal tradition'' of the Bank of England, which regulates the banking industry here.

Other countries, recognizing the advantages of giving their corporations easier access to capital, have liberalized their financial markets. That's the case in West Germany, France, Australia, New Zealand, and Canada.

``It is getting through even the thickest heads that if [a nation] protects its financial services market, it becomes a weakness,'' Price asserts.

Here in Britain, Citicorp has more freedom to conduct other financial activities besides pure banking than it has in the United States. It is active in stockbroking, underwriting, life insurance, and insurance brokering, all areas where it faces statutory limitations in the US. Moreover, the British operation is profitable.

Price figures Citicorp can gather some ``experience and lessons'' in Britain that it will be able to use in the US as regulations ease there.

Some recent actions of Citicorp illustrate its drive:

Late last year it brought a minority stake in London stockbrokers Vickers da Costa, a firm especially active in international markets. Then it bought a similar 29.9 percent of Scrimgeour, Kemp-Gee & Co., one of the biggest British stockbrokers. These two were merged as Citicorp Scrimgeour Vickers in the spring.

Citicorp plans to take full ownership of the merged firm next year when the London exchange allows it.

In January it became the first foreign bank to join the circle of British clearing banks -- those involved in settling mutual indebtedness between banks, a result of the fact that many checks deposited for collection in each bank are written on deposits in another bank.

In February it became the first bank, British or foreign, to buy a ``discount house'' -- Seccombe, Marshall & Campion PLC. It is one of the Bank of England's nine agents in the U.K. money markets. Citicorp paid about $7.6 million, a small amount for this banking giant.

Citicorp also unveiled in February its Citibank Business Bank, pushing for customers among small and medium-size British companies, with sales of $25 million to $1 billion. Foreign banks have typically paid more attention to multinationals or businesses from their own countries, partly because smaller domestic firms usually have strong ties with domestic banks.

In June Citicorp announced it will treble its investment in its London-based capital-markets subsidiary over the next 12 months to about 250 million ($335 million). The increased capital will make the subsidiary, Citicorp International Bank Ltd. (CIBL), one of the largest financial institutions in the City of London (its financial district). CIBL is parent of Scrimgeour Vickers, Seccombe, Marshall & Campion, and four other subsidiaries active in international equities and venture capital.

In June the Bank of England also named Scrimgeour Vickers one of 29 primary dealers in the ``gilt-edged'' government securities market.

In addition to all this, Citibank Savings has some 40 retail branches in the country and Citicorp a dozen commercial branches outside London. Citicorp-owned Diners Club International has 300,000 U.K. customers, and its cards are accepted at more than 55,000 retail outlets in the country. It operates retail-card programs for such key retailers as Marks & Spencer, Allders Department Stores, Colliers, and Richard Shops.