FILE PHOTO - FILE PHOTO -- People walk beneath a Citibank branch logo in the financial district of San Francisco, California, U.S. on July 17, 2009. REUTERS/Robert Galbraith/File Photo
HONG KONG: Citigroup said a focus on rich young Asians and new products has helped accelerate net new money growth at its Asia-Pacific consumer wealth business in 2016 to about 10%, and a similar annual growth is expected over the next few years.
Anand Selvakesari, Citi’s Asia-Pacific head for consumer banking, told Reuters that growth in net new money, a key measure of profitability of the wealth business, improved in 2016 from around mid-single digit levels in the last four to five years.
The bank has expanded its digital offerings to tap more young clientele, and has also launched new products, Selvakesari said in an interview.
He did not disclose net new money dollar figures. Private bankers and wealth managers usually are guarded in giving out numbers of any kind because of client privacy concerns and competitive reasons.
Asia has emerged as the main battleground for global wealth managers, with higher economic growth, rapidly rising wages and a thriving entrepreneurial ecosystem producing rich clients at a pace faster than the western world.
That trend helped Citi’s regional wealth business add 8%-12% new customers last year, the executive said.
In Asia, the Citi wealth business, as part of its consumer banking unit headed by Selvakesari, taps people with investable assets of between US$50,000 and US$10mil. Those with more than US$10mil are clients of the bank’s private banking unit.
Citigroup’s top three wealth markets in Asia by revenue are Hong Kong, Singapore and Taiwan. The bank’s other fast-growing markets in the region include China, India, South Korea and Australia.
“There is continuous wealth generation happening - a growing emerging affluent segment. At the top of the pyramid, wealth continues to grow in these big markets,” Selvakesari said.
“The potential is there for double-digit growth given the demographics in these markets.”
In 2016, Asia-Pacific posted a rise of 4.5% in total household wealth to US$80 trillion, as per Credit Suisse Research Institute’s annual global wealth report, versus 2% growth in North America and a negative 1.7% in Europe.
Wealth per adult in Asia-Pacific increased by 2.9% in 2016, the fastest pace among all regions, it said, adding wealth in Asia-Pacific will likely grow by 6.3% annually, reaching US$109 trillion by 2021.
Citi posted on Wednesday a 7% rise in its global net income to US$3.57bil.
The bank’s Asia consumer banking revenue rose 4% from a year ago to US$1.7bil, helped by growth in the wealth management and cards businesses, it said in a presentation. The bank does not break down regional wealth management revenue.
Citi has tied up with e-commerce companies in Asia such as ride-hailing firm Grab and online retailer Lazada Group to boost its credit card business in the region.
Selvakesari said one in four credit cards for the bank are now acquired through digital platforms such as China’s mobile social media network WeChat and Japan’s Line instant messaging service, with plans to ramp it up to 50% in the next three years. - Reuters
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