Citi Asia plans more branches in the cities

Consumer banking is the backbone of Citi's Asia network. We talk to regional consumer head Jonathan Larsen about the business.

Asia was the largest contributor to Citi's consumer banking business globally in terms of net income in 2009, and again in the first quarter this year. Regional consumer head Jonathan Larsen discusses his plans for the future and the changing trends of the Asian consumer.

How important is the consumer business to Citi in Asia-Pacific?
We live in a region that is home to more than half the world's population and with the growth rates in Asia-Pacific, the rise of the Asian consumer will be the story of the coming decade. As such, this region is crucial to not only our Asia-Pacific franchise but also our global franchise. This is why we have invested heavily in the region and see growth opportunities across many markets. Some recent examples include introducing debit cards in China in 2008 and launching retail banking services in Vietnam in November 2009.

Our branch numbers, which were under 100 a decade ago, are now over 700 and this includes opening close to 50 new branches across the region in the past 12 months. We have opened new branches in many Asia-Pacific markets, including China, Japan, Malaysia, Hong Kong and Singapore in the past year.

But what is just as interesting is the story behind the numbers or the branch openings. Our customers want increased flexibility and mobility, they want to be able to bank on-line, or on the way to work and with greater immediacy if they need to visit a branch. We therefore opened branches in subway stations in Hong Kong [MTR] and Singapore [SMRT] in the last year. On most days we see close to 1 million people pass by these locations. This also helps build our brand and perceived presence in these markets.

That sounds as if you are primarily focused on urban areas, is that right?
Our branch expansion is increasingly focused on the urbanisation trends we are seeing. For the first time in history more than 50% of the earth's population live in cities and by 2050 it is expected be around 75%. You will see Citibank continuing to open new branches in the major metropolis areas in Asia. However, we are also mindful of supporting rural communities. About a year ago we launched a rural lending business in China and it is registering strong growth.

It's important to note that it's not just about opening new branches. Our branches are also offering increased speed, flexibility and convenience to our clients through innovation. For example, in Japan our hi-tech new branches are more akin to something out of a Hollywood movie with touch screens and interactive communications with remote branch managers on screen. Asia is also setting the benchmark, as these types of branches will be rolled out further across the world in the coming years. We are also very aware that for many of our clients the personal touch is still important and we focus quite a lot of our efforts on the quality of the branch staff and the customer service we provide. 

Innovation is crucial throughout the consumer banking business. We have launched mobile banking in several markets in Asia in the past year, including in China and Singapore, and upgraded our Internet capabilities. It is now possible to pay bills, move your money overseas, buy stocks or carry out your banking services on your iPhone via a Citi platform.

This investment in technology and branches is bearing results. In the first quarter we were the largest contributor to Citi's consumer business globally and the Asia-Pacific will continue to drive our growth across our global consumer business.

Do you tie this in with your corporate clients in any way?
Yes, we do. There are several opportunities that arise from our corporate clients. Some of these companies have 20,000 plus employees and we have become their consumer bank of choice, thanks to working closely with our global transaction services or global subsidiaries businesses. In some companies in India and Singapore, for example, we have opened branches on their premises. Multinational companies in Asia too are increasingly interested in having Citi branches on their sites and it is a big growth area for us.

In what other ways are you using your platform to help Asian consumers?
Another opportunity we have is across our wealth management platform. The scale and diversity of our businesses mean that we are able to offer clients, through a single relationship, the full range of products and services offered across our businesses, from the consumer bank to the private bank to the commercial bank.

We recognise that clients are also becoming increasingly mindful that their wealth should be managed in totality and in perpetuity for the next generation. Citigold Private Client (CPC), which we launched last month in Hong Kong and Singapore, adopts a disciplined portfolio-based approach towards assessing clients' assets and implementing a wealth management strategy that covers an individual's personal and business wealth.

CPC is a powerful wealth management proposition in meeting the needs of high-net-worth individuals (HNWIs) with assets under management of $1 million and above. Singapore and Hong Kong, well-established markets, were chosen as launch markets. CPC will be rolled out across the region in phases. India and Taiwan are scheduled next for implementation in the second half of the year, followed by Korea, Japan, Malaysia, Indonesia and the Philippines.

By 2013, Asia is expected to overtake North America as the single-largest repository of HNW wealth, and Citi is well positioned to capitalise on this growth.

It has been a challenging year for Citi globally. What are some of the issues that you point to, when critics bring this up?
There are many things to highlight but one I would point to is the trust that clients have with us. This is underlined by the fact that during the past 12 months our deposits in Asia-Pacific at the consumer bank grew by more than 15% to close to $100 billion. In light of the market and circumstances, this was a tremendous vote of confidence in Citi. 

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