The escalating wealth profile in Asia has attracted a number of global banks to expand their business in the region in recent times. Sensing huge opportunities, Citigroup Inc. C, intends to double the number of wealth-management clients in Asia over the next five years to 1 million.
Jonathan Larsen, the bank’s global head of retail banking and head of consumer banking for Asia Pacific, revealed such plans in a recent interview with The Wall Street Journal. Larsen stated that the bank is focused on capitalizing on the growing middle class. He added, “Asia will grow disproportionately to the rest of the world.”
The New York-based banking giant intends to expand the business targeting two segments – clients with assets for investments in the range of $100,000 and $1 million and clients with assets between $1 million $10 million. The potential markets include Singapore, Hong Kong, Taiwan, India, China and South Korea.
Further, to support the expansion, Citigroup intends to recruit more relationship managers, though the rate of hiring may not be at a similar pace as a twofold increase in wealth management clients.
Like several banks, Citigroup has also embraced new technology to attract and retain clients providing enhanced and improved online services. However, emphasizing the continued need of wealth managers at the bank, Larsen said, if clients “are working across multiple currencies” and are investing in real estate, for example, “you’re going to need more than a robo adviser.” Robo advising is an automated service offered by banks which assists in online portfolio planning for customers.
Other multinational banks that are focusing on expanding in Asian wealth management operations include Morgan Stanley MS, HSBC Holdings plc HSBC and Credit Suisse Group AG CS.
We remain encouraged by the potential efforts of Citigroup in fortifying its wealth management business in Asia. Undoubtedly, it reflects that the company remains focused on tapping opportunities in growing regions while at the same time it continues to retreat from unprofitable markets.
Citigroup currently carries a Zacks Rank #3 (Hold).
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