Citi aims for Asian growth

05 April 2011

HONG KONG: Citigroup is planning to greatly increase its investment in Asia, anticipating the substantial opportunities the region presents for brand owners in this sector.

The US financial services giant is allocating between $3bn (€2.1bn; £1.9bn) and $4bn to its consumer-facing operations in the next three years, and Bloomberg estimated half this amount could be directed towards Asia.

Citigroup's income from Asia rose by 52% last year, reaching $2.2bn, providing 46% of the firm's business with the public.

"The opportunity is very significant," Jonathan Larsen, Citigroup's head of consumer banking for Asia Pacific, told Bloomberg.

"I think the broad trend will continue, i.e. the growth of the middle class, the increase in concentration of affluent, the increase in growth of consumption."

The company polled 8,000 people in Hong Kong, India, Indonesia, Singapore, South Korea and Taiwan, all "emerging affluent" individuals carrying a net worth of $10,000 to $100,0000.

The size of this audience is growing in the 8% to 15% range annually across Asia's core countries, and already stands at 500m individuals.

Overall, 80% of the survey sample did not wish to wait for service, and 76% prioritised a strong online presence.

Another 68% desired a bank which used technology as a means of making their finances less complicated, and 66% were hoping for longer opening hours.

In reflecting such results, Citigroup is extending opening times in markets including Hong Kong, and introducing 24 hour telephone banking.

Extra objectives involve creating "smart branches" which contain teleconferencing facilities and equip staff with Apple's iPad tablets, enabling advisers to easily talk customers through Citigroup's online services.

The company currently has roughly 40 outlets boasting such capabilities, and ultimately hopes to convert all 720 sites in its network so they meet this model.

"Emerging affluent clients are aspirational and want a banking partner that suits their lifestyles based around digital banking with the ability to bank when, where and how they want," said Larsen.

"What we are trying to do is to re-engineer the customer experience. We've tried to make it a much more interactive experience," said Larsen.

Among Citigroup's wider goals is trebling its number of branches in China to 100, having also recently unveiled its first fully-functional airport unit in Chongqing.

Figures from the Asian Development Bank have suggested that expenditure levels in Asia should hit $32tr by 2030, measured against $4.3tr as of 2008, indicating the enormous potential the continent could yield.

"With the launch of this new value proposition, we now have a complete and seamless wealth management offering for the entire wealth continuum, serving clients at different life stages and with different wealth pools," said Larsen.

Data sourced from Bloomberg, Asset Magazine; additional content by Warc staff