CitiGroup Tilts Towards Asia For Wealth Management Growth

The U.S. bank plans to double the number of wealth-management clients in Asia to one million.

Citigroup Inc. (NYSE:C) has devised strategy to increase the number of wealth management clients in the Asia Pacific region to over a million, as the world’s largest investment banking group seeks to take advantage of the growing affluence in the region.

According to Jonathan Larsen, who is responsible for the head of retail and consumer banking in the Asia Pacific region, said that the financial institution wants to take advantage of the growing middle class in the region, especially with China, producing millionaires and billionaires every year. The problem arises for Citi’s potential clients regarding what to do with people’s incomes who want to save.

Wealth management will become the next big deal in the region, where consumer banking that is already a big business. During the first quarter of the year, consumer banking accounted for more than 20% of the global consumer banking revenue.

Mr. Larsen said that the bank plans to add customers based on two categories: those who possess assets between $100,000 and a million dollars; and those who possess assets between a million dollars and 10 million dollars. The focus will be on the Singaporean, India, Chinese, Taiwanese, South Korean markets, etc.

The global investment banking group is not alone though. It faces competition from its competitors, such as HSBC, JP Morgan, Goldman Sachs, etc. in the region, who are also striving to deliver services to the clients, and those who might be enticed to the tide of automated services that can help with online portfolio planning.

In this process of expansion, Citi is planning to appoint more relationship managers, though it would not be limited to base on the number of netted clients. Currently, Citi manages $255 billion of its clients’ assets, and growing them between 5-10% every year. With the expansion ahead, it is expected to deliver double-digit growth, though that depends on the environment too.

Last year, Citigroup has unveiled  measure called the “client wealth review”, a sort of a stress test for certain clients in Hong Kong and Singapore, to examine how much shock can a customer’s portfolio can withstand in terms of the impact of a potential financial crisis. The plan will be rolled out to other countries, such as China, India, Taiwan, etc. in the next year.

Citigroup stock price ended the day at $56.68, a massive drop of 1.25% since the previous day, despite of the plans revealed in Hong Kong.