Exclusive: Citigroup will hire 3,000 in Asian institutional banking to drive growth

REUTERS / Athit Perawongmetha

HONG KONG, June 7 (Reuters) – Citigroup Inc (CN) plans to hire approximately 3,000 new employees for its institutional business in Asia in the coming years, focusing on a fast-growing region where it has exited consumer banking in most of the markets, said its Asia Pacific CEO.

Previously unreported staff expansion plans underscore Citi’s ambition to make institutional banking and wealth management engines for growth, seeking to boost revenue in a region that has become a battleground for global banks seeking to exploit its vast economies and growing wealth.

Citi’s institutional business includes investment banking and corporate and commercial banking units that provide trade finance, cash management, payments and custody services, among others.

“We’re talking real meat-and-bones on growing our business across Asia,” Asia Pacific CEO Peter Babej told Reuters in an interview. Babej took over the role in 2019 and previously served as the global head of the bank’s financial institutions group.

Citi has approximately $ 200 billion of assets in Asia and the bank was “on track” to increase client assets by $ 150 billion by 2025, a spokesperson said, despite global economic and market uncertainties.

The bank’s expansion of Asian institutional operations adds to plans announced last year to hire approximately 2,300 people by 2025 for its wealth management unit.

Citi said last year that $ 7 billion of capital freed up from divesting consumer banking assets in 13 markets, 10 of which in Asia, would be returned to shareholders or invested in profitable institutional banking and wealth management units.

The bank’s main regional institutional operations are in Hong Kong and Singapore, and Babej said these two hubs would be a focal point for the unit’s additional 3,000 employees. He does not disclose the existing headcount for the company.

“This gives you the feeling that the size of the set of investments we’re talking about from both the people perspective and the capital point of view is very significant,” Babej said.

Last year, Citi created a single wealth management business to provide services to affluent clients and people with extremely high net worth. Asset business in Asia is also concentrated in Singapore and Hong Kong, hubs where the bank still maintains its consumer banking units.

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“As global growth slows, Asia is slowing too, but relative growth is still higher than most other places in the world,” Babej said.

“And that growth, which translates into portfolio wealth, is what we are incredibly excited about and the global solutions we can provide for 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, uncertainties about Beijing’s so-called “common prosperity” drive and the challenges of COVID control measures.

“Even at a lower GDP (gross domestic product) growth rate, it’s something that’s actually growing faster than it is growing in the rest of the world,” Babej said, noting that the impact of the drive for common prosperity on investment international customers was difficult to predict.

Although a sharp slowdown in the Chinese economy was expected this year due to pandemic-induced challenges, the Citi Asia chief said volatility and uncertainty related to China’s economic and geopolitical challenges will continue in the near term, but they will not change the bank’s strategy.

“We are in China for the long term,” he said. “There are question marks in light of the geopolitical and macroeconomic situation, but in the long term we firmly believe in the importance of China.”

Citi is expanding into China: in 2020 the bank received Beijing approval to carry out custody business and in December last year it applied for a brokerage license, which would allow it to offer investment banking services to clients locally. .

Babej, however, admitted that not being able to travel to China due to the mandatory weeks-long quarantine for inbound travelers as part of the country’s zero-COVID approach has been a challenge for both Citi customers and bankers.

“Our clients are much more willing to work on Zoom, but ultimately, especially from a private bank perspective, not being able to travel is a challenge.”

Reporting by Scott Murdoch and Selena Li in Hong Kong; Editing by Sumeet Chatterjee and Kenneth Maxwell

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