Citi shakes up private bank leadership in Asia

Bassam Salem will become CEO of Citi private bank, replacing Aamir Rahim, who has been appointed head of Citi’s public sector group for Asia-Pacific.
Bassam Salem, Citi
Bassam Salem, Citi

Citi announced yesterday that Bassam Salem will become Asia-Pacific CEO of Citi's private banking division. Salem will replace Aamir Rahim, who has been appointed head of Citi’s public sector group for Asia-Pacific.

The shake-up is being positioned by Citi as a move that plays to each banker’s strength: bringing in a seasoned private banker to run the private bank and repositioning Rahim back into a role that will let him use his investment banking skills more effectively. But outsiders — and even some Citi sources — say it’s yet another example of a private bank trying to make sure its Asia strategy is working, because this might be the only growth game on the cards. Yesterday, we reported on an upcoming report to be released by Julius Baer and CLSA that claims China alone will have 1.4 million people with an average wealth of $5 million by 2012, making the region a juicy target for wealth management specialists.

Salem certainly has experience in private banking, and his background might give him more freedom to shake things up — he is a Citi veteran, but also someone who could be viewed as an outsider. He joined Citi private bank in Geneva in 1985 and for the next 15 years held several roles including serving as a banker, regional investments head in Asia and Europe, the Middle East and Africa, and ultimately as global investments head.

In 2001 he joined EFG Bank, a privately held Swiss Bank, to start and lead their investment division. After helping list the bank on the Swiss Stock Exchange, he moved to Singapore to expand EFG in Asia and the Middle East.

“We are delighted to welcome Bassam back to Citi private bank, following a successful entrepreneurial career at EFG and believe that his broad experience will enable us to take the business to a new level and capitalise on the opportunities we are seeing in Asia,” said Jane Fraser, CEO, Citi private bank. “We especially want to thank Aamir for his leadership over three years of building the private bank’s Asia-Pacific franchise and for his many contributions to the business.”

“The private bank is key to Citi Asia-Pacific’s institutional business,” added Shirish Apte, Asia-Pacific CEO of Citi in a statement. “Over the past three years, Aamir has made great strides in strengthening the links between our institutional bank platform and our high net worth clientele, and we look forward to Salem building on that achievement.”

Observers latched on to the phrases “take the business to a new level” and “building on that achievement”, noting that bringing in fresh blood appears to be a driving factor in this switch. One Citi banker, who asked to remain off the record, said this decision was forecastable, noting that competitors’ assets under management (AUM) appear to be growing rapidly, which could be worrying Citi’s upper management. And that could be precisely why the US bank has chosen to bring in a veteran private banker who has cut his teeth growing AUM for his firm in the region.

Salem will be based in Hong Kong and will join Citi’s Asia-Pacific executive committee. He will start his new role on October 1. Deepak Sharma, chairman of Citi private bank, has agreed to take on leadership of Citi private bank in Asia on an interim basis during the transition.

Another Citi banker noted that the move played to Rahim’s strengths as well, saying that he is moving to a “big job in the public sector group that covers sovereign wealth funds ... which means he will be pitching to institutional clients rather than tai tais”.

Perhaps casting private banking as a job of merely wooing woman who lunch is dismissive, but it is clear that Rahim’s background is more of a fit with institutional clients.

Rahim was appointed CEO of Citi’s global wealth management business in Asia-Pacific on August 18, 2008. He was responsible for managing the private bank and Citi Smith Barney in the Asia-Pacific region, as well as Nikko Cordial Securities in Japan. With the sale of Nikko Cordial Securities and the move of Citi Smith Barney into a joint venture with Morgan Stanley, he then focused on the private bank.

But it is his earlier banking career that people are referencing. Prior to the private banking role, Rahim was co-head of fixed income, currencies, commodities and capital markets origination for the Asia-Pacific region. His responsibilities included sales and trading of loans, bonds, foreign exchange and interest rate products, as well as the origination, structuring and execution of bonds, leveraged finance and equity capital market products.

Basically, during the past 15 years, Rahim has been a mainstay in the Asian fixed-income business, having executed a wide range of structured derivatives as well as landmark and inaugural issues for Asia’s premier corporate, financial and sovereign borrowers.

He was previously employed at Peregrine as head of fixed income derivatives sales and trading. He has also worked at both Goldman Sachs and J.P. Morgan in derivatives structuring and distribution. So this new role does seem more of a fit with his overall banking career.

But that’s not to say he didn’t accomplish changes at Citi. One of Rahim’s largest contributions during his tenure as head of the private bank was to move compensation away from a commission-based structure. Another area to Rahim’s credit is actually ensuring that the private bank uses open architecture. To this end, Citi was one of the first private banks to create an investments lab with the specific mandate to focus on portfolio construction.

We also awarded Citi as the Best Private Bank in 2010, a testament to Rahim’s leadership.

Nonetheless, private banks around the region are definitely hot and bothered about getting their strategy right. This move follows a fairly big shake out at both Credit Suisse and BNP Paribas’ private banking earlier this year. In July we reported that Marcel Kreis was assuming a newly created position as chairman of Credit Suisse’s private banking in Asia-Pacific, effective January 1, 2012. That move enabled the bank to relocate Francesco de Ferrari to the region on August 1 as the successor to Kreis as head of private banking Asia-Pacific as of January.

In January we reported that Thierry Dana had relinquished charge of wealth management for North Asia at BNP Paribas after less than 18 months and the bank was using his relocation to announce a new structure for its wealth management business in Asia-Pacific.

Put simply, this seems to be the latest instance of a global bank trying to get its Asia strategy right — as another banker said: “Earlier predictions were AUMs in Asia will exceed those in the west by 2015, but if Western economies continue to meltdown at this pace Asia AUMs could start topping by next year”.

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