CITIBANK Bhd sees Malaysia as having a very good general operating environment for banks, said chief executive officer Piyush Gupta.
“The rule of law and the administrative process work, there is good access to talent/people and the overall nature of the economy and growing middle class are suitable to building a banking environment,” he told StarBiz.
Gupta said Citibank’s global strategy was to be an “embedded” bank, to compete with local banks, and not be a niche player.
“We are in every business. We bank with the mass market, the high net worth consumers and small and medium enterprises in every industry. Globally, we have a foot in every pie. Our principal value-add is that we can leverage and bring global expertise in every facet of financial services into the country. At some stage we are already going mass market, for example, India,” he said.
Gupta said local banks had become more competitive over the last 12 months as a lot of issues on non-performing loans, mergers and consolidation had been resolved or adequately resolved for them to refocus on building market position and market share.
He, however, pointed out that the banking industry still had a long way to go in embracing and leveraging of technology.
“It’s ironic that some of the best technology is available through Malaysian corporations but local banks have yet to leverage the technology adequately at this point,” Gupta said, adding that part of it could be due to consolidation and getting technology platforms aligned.
Gupta feels that the local banks with their large network of branches, capital and equity base, are already capable right now and he does not see a significant need to reduce the number of local banks with a second round of mergers.
“If you want to keep pace and liberalise the system then the local banks, particularly the big banks, would need to focus on really building market share and enhancing their competitive positions rather than on merging,” he stressed.
Gupta said that it was a question of creating management energy to focus on building the business rather than spending a lot of time doing other things.
“To me that is where the payoffs are going to be in the next two to three years as long as banks have management focus and drive to build business rather than spend a lot of time doing other things,” he said.
Gupta admits that expanding the bank’s own turf now would be more difficult with the other banks' aggressive marketing. “We have to work three times as hard to retain our market position,” he said.
But according to Gupta, Citibank does have a few things going for it.
“As a global bank, we can bring technology, skill and cost efficiency into our business. We are able to do our processing globally and regionally and this really helps in operating efficiencies,” he said.
Gupta added that one of the bank’s core competencies was in marketing, to segment finely and offer suitable marketing packages.
“We have enough core competencies to be able to hold market share,” he said, adding that liberalisation would help the bank stay ahead of its competitors by enabling it to bring in a lot of new products and packages with flexible pricing to market.
Another advantage for the bank is its capacity to respond quickly to changes and opportunities in the marketplace.
“Our ability to learn, train our people and transfer into the country is much greater for us as we are a global bank. We are ready in a sense that our network exists,” he said.