Citigroup Inc wants to hire 3,000 additional employees for its Asia institutional business in the next years, strengthening its focus in a fast-growing area where it has departed consumer banking in the majority of markets, according to its Asia Pacific top executive.
The previously unknown employee expansion plans highlight Citi’s intention to become institutional banking and wealth management growth engines, aiming to boost income in a region that has become a battleground for global banks wanting to harness its enormous economies and expanding wealth.
Citi’s institutional business encompasses investment banking as well as corporate and commercial banking departments that offer services such as trade financing, cash management, payments, and custody.
“We’re talking about real meat on the bones on growing our business across Asia,” Asia-Pacific CEO Peter Babej told Reuters in an interview. Babej took on the role in 2019 and previously worked as global head of the bank’s financial institutions group.
Despite global economic and market risks, Citi has roughly $200 billion in wealth assets in Asia, and the bank was “on track” to increase customer assets by $150 billion by 2025, according to a spokesman.
The bank’s growth of Asian institutional business follows plans announced last year to add approximately 2,300 workers for its wealth management section by 2025.
Citi announced last year that $7 billion in capital would be repatriated to shareholders or invested in lucrative institutional banking and wealth management operations following the divestiture of consumer banking businesses in 13 regions, ten of which were in Asia.
The bank’s primary regional institutional business is based in Hong Kong and Singapore, and Babej stated that these two hubs would be a key focus of the unit’s 3,000 new staff. It does not reveal the company’s current headcount.
“That gives you a sense that the magnitude of the set of investment we’re talking about both from a people perspective, and from a capital perspective, it is very significant,” Babej said.
Citi established a single wealth management company last year to serve clients in the affluent and ultra-high net worth segments. The Asia wealth business is also based in Singapore and Hong Kong, where the bank still has consumer banking operations.
Wealth managers at the world’s largest banks are adjusting their expectations for Asia, following China’s regulatory crackdown and COVID-driven slowdown, according to bankers and analysts last month.
“As global growth slows down, Asia slows down as well, but the relative growth is still higher than most other places in the world,” said Babej.
“And that growth, which translates into portfolio wealth, is one that we’re incredibly excited about, and the global solutions that we can provide for that wealth are increasingly relevant for our Asian clients.”
Despite macroeconomic headwinds, concerns surrounding Beijing’s so-called “shared prosperity” goal, and obstacles from COVID control measures, Babej believes the wealth accumulated and continues to develop in China is “quite considerable.”
“Even at a lower GDP (gross domestic product) growth rate, it’s something that actually grows faster than it does in the rest of the world,” Babej said, noting the common prosperity drive’s impact on clients’ international investing was hard to predict.
Despite the fact that China’s economy is expected to slow sharply this year due to pandemic-related challenges, among other things, the Citi Asia head stated that volatility and uncertainty related to China’s economic and geopolitical challenges would persist in the short term but would not change the bank’s strategy.
“We’re in China for the long term,” he said. “There are question marks in light of the geopolitical situation and macroeconomic situation but longer-term we are big believers in the importance of China.”
Citi has been growing in China; in 2020, the bank gained Beijing’s clearance to conduct custodial operations, and in December of last year, it applied for a brokerage licence, which would allow it to offer investment banking services to Chinese clients.
Babej, on the other hand, confessed that being unable to travel to China due to the country’s mandated weeks-long quarantine for entering travellers as part of the country’s zero-COVID stance was a burden for both Citi clients and bankers.
“Our clients are much more willing to work over Zoom but at the end of the day, especially from a private bank view, not being able to travel is a challenge.”
(Adapted from Reuters.com)