Exclusive-Citigroup to hire 3,000 individuals to expand its institutional banking operations in Asia – Asia CEO
Hong Kong (Reuters) – Citigroup Inc (NYSE:C) plans to hire approximately 3,000 new employees for its Asia institutional business over the next few years, sharpening its focus on a fast-growing market where it has abandoned consumer banking in most countries.
The previously unreported personnel expansion plans underscore Citi’s desire to become an institutional banking and wealth management growth engine, attempting to increase income in a region that has become a battleground for global banks wanting to harness the region’s enormous economies and rising wealth.
Citi’s institutional business is made up of investment banking, corporate banking, and commercial banking. These businesses offer trade financing, cash management, payments, and custody, among other services.
In an interview with Reuters, Asia-Pacific CEO Peter Babej said, “We’re talking about the meat and potatoes of expanding our business across Asia.” Before taking this job in 2019, Babej was in charge of the bank’s financial institutions group around the world.
According to a spokesman, Citi has approximately $200 billion in wealth assets in Asia, and the bank is “on track” to increase client assets by $150 billion by 2025 despite global economic and market risks.
The bank’s growth of its Asian institutional business follows plans announced last year to hire approximately 2,300 wealth management employees by 2025.
Citi stated last year that $7 billion from the sale of consumer banking businesses in 13 regions, 10 of which were in Asia, will be repaid to shareholders or invested in profitable institutional banking and wealth management groups.
The bank’s primary regional institutional businesses are in Hong Kong and Singapore, and Babej stated that these two hubs would be a key focus of the unit’s 3,000-person expansion. It does not reveal the organization’s current headcount.
“This gives you a sense of the size of the commitment we’re discussing from both a human and a financial standpoint,” Babej added.
A year ago, Citi formed a single wealth management division to provide services to clients in the affluent and ultra-high net worth segments a year ago. In Singapore and Hong Kong, where the bank still has consumer banking operations.
“RELEVANCE OF CHINA”
As a result of China’s regulatory crackdown and COVID-driven slowdown, wealth managers at the world’s largest banks are lowering their expectations for Asia, bankers and analysts told Reuters last month.
“As global growth slows, Asia’s growth slows as well, but Asia’s relative growth remains stronger than most other regions of the world,” Babej explained.
“We are thrilled about this growth, which means portfolio wealth, and the global solutions we can offer our Asian clients for this wealth are becoming more and more important.”
Despite macroeconomic headwinds, uncertainties surrounding Beijing’s so-called ‘common prosperity‘ initiative, and challenges posed by COVID control measures, Babej deems the accumulated and growing wealth in China to be “extremely significant.”
“Even at a lower GDP (gross domestic product) growth rate, it grows faster than the rest of the world,” Babej said, adding that the impact of the common prosperity drive on clients’ international investing was uncertain.
The head of Citi Asia stated that volatility and uncertainty related to China’s economic and geopolitical challenges would continue in the short term, but would not alter the bank’s strategy. This was true even though China’s economy was expected to slow down sharply this year, in part because of problems caused by the pandemic.
He stated, “We’re in China for the long haul.” In light of the geopolitical and macroeconomic situations, there are doubts about China’s significance, but we are long-term believers in its significance.
Citi is expanding in China; in 2020, the bank received Beijing’s approval to conduct custodial business, and in December of last year, it applied for a brokerage licence that would allow it to offer investment banking services to local clients.
According to Babej, Citi clients and bankers faced a challenge when they were unable to travel to China because of the country’s zero-COVID policy requiring a weeks-long quarantine for inbound travellers.
“Our clients are much more willing to work via Zoom, but ultimately, especially from the perspective of a private bank, the inability to travel is a challenge.”
