© Reuters. FILE PHOTO: Citi bank’s logo is pictured in an exhibition hall in Bangkok, Thailand, May 12, 2016. REUTERS / Athit Perawongmetha / File Photo
(Corrects to say in the fourth last paragraph uncertainty related to China’s economic situation will continue in the short term)
By Scott Murdoch and Selena Li
HONG KONG (Reuters) -Citigroup Inc plans to hire around 3,000 new employees for its institutional business in Asia over the next few years, sharpening its focus in a fast-growing region where it has left consumer banking in most markets, says its top executive in Asia and the Pacific. said.
The previously unreported staff expansion plans underscore Citi’s ambition to turn institutional banking and wealth management into growth engines that seek to boost revenue in a region that has become a battleground for global banks seeking to leverage their vast economies and growing prosperity.
Citi’s institutional business includes investment banking and corporate and commercial banking units, which provide, among other things, trade finance, cash management, payments and custody services.
“We are talking about real meat on the bones of growing our business across Asia,” Asia-Pacific Director Peter Babej told Reuters in an interview. Babej took on the role in 2019 and has previously worked as global head of the bank’s financial institution group.
Citi has about $ 200 billion in wealth assets in Asia, and the bank was “on track” to grow client assets by $ 150 billion by 2025, a spokesman said despite global economic and market uncertainty.
The bank’s expansion of Asian institutional business comes on top of the plans announced last year to hire around 2,300 people by 2025 for its asset management unit.
Citi said last year that $ 7 billion in capital released from divestments of consumer banking companies in 13 markets, 10 of which were in Asia, would either be returned to shareholders or invested in lucrative institutional banking and wealth management units.
The bank’s main regional institutional business is in Hong Kong and Singapore, and Babej said these two hubs would be a key focus for the 3,000 additional staff for the unit. It does not disclose the existing number of employees for the company.
“It gives you a sense that the size of the set of investments we are talking about, both from a people’s perspective and from a capital perspective, is very important,” Babej said.
Last year, Citi set up a single asset management company to provide services to clients from the affluent segment as well as individuals with ultra-high net worth. Asia’s wealth business is also centered in Singapore and Hong Kong, hubs where the bank still retains its consumer banking units.
‘THE MEANING OF CHINA’
Wealth managers in the major global banks are lowering their expectations for Asia, after China’s regulatory intervention and COVID-driven downturn helped push customers to the sidelines, bankers and analysts told Reuters last month.
“When global growth slows, Asia also slows down, but relative growth is still higher than most other places in the world,” Babej said.
“And the growth that is being translated into portfolio wealth is one that we are incredibly excited about, and the global solutions that we can deliver to that wealth are increasingly relevant to our Asian clients.”
Babej believes that the wealth that has been accumulated and continues to grow in China is “very significant”, despite macroeconomic headwinds, uncertainty about Beijing’s so-called ‘common prosperity’ and challenges from COVID control measures.
“Even at a lower growth rate in GDP (gross domestic product), it is something that is actually growing faster than it does in the rest of the world,” said Babej, noting that the impact of joint prosperity on customers’ international investment was difficult to predict .
Although China’s economy was expected to decline sharply this year due to pandemic-induced challenges, among others, the Citi Asia chief said that volatility and uncertainty related to China’s economic and geopolitical challenges would continue in the short term but would not change the bank’s strategy.
“We are in China for the long term,” he said. “There are questions in the light of the geopolitical and macroeconomic situation, but in the long run we strongly believe in the importance of China.”
However, Babej admitted that not being able to travel to China due to mandatory weekly quarantine for incoming travelers as part of the country’s zero-COVID approach was a challenge for both customers and bankers in Citi.
“Our customers are much more willing to work over Zoom, but at the end of the day, especially from a private bank’s point of view, it’s a challenge not to be able to travel.”