In Citigroup, the client comes first. The whole structure of the integrated commercial and investment bank of Citibank and Salomon Smith Barney is designed to give the client whatever they need. And in Asia, clients need a lot. The concept behind the banking cross-sell is not new, but making it work in practice has proved harder than many at first expected.
It is undoubtedly the right strategy because it enables both corporate and institutional clients to get the best deals and the deepest relationships. Citigroup in Asia has made it work better than any other institution and it is winning key mandates on its ability to provide the clients with the whole range of banking services from loans to FX, equity to high yield bonds, trade finance to custody.
It is the sheer breadth of what Citigroup offers that makes it so impressive. It is a top tier competitor in every market in which it is present. This is true both in terms of products ? equity, debt, custody, cash management and so on ? as well as geography. Managing this matrix is challenging, but Citigroup is doing it better than any.
The bank's localization in every country in Asia has continued apace this year. It has increased its on the ground presence in every market and has made a few key acquisitions. In Taiwan, its 15% investment in the five financial services businesses of the Fubon Group is one of the most significant deals of the year. It shows Citibank putting real money into the local market and moving away from its traditional approach of organic growth to increase its localization.
In many countries, Citigroup is actually viewed as a local player and competes as much with the local institutions as it does with its international counterparts ? a real testament to how embedded the bank is in Asia.
In its investment banking products, offered through Salomon Smith Barney, the bank has had admittedly mixed fortunes. But the team remains strong in both equity and debt and has some key mandates that will propel it up the league tables in 2001. Its equity research in particular has enjoyed a year of growth both in terms of coverage and respect, with more analysts covering more stocks than ever before. It has a strong equity capital markets franchise, particularly in Singapore and south east Asia. And its M&A advisory work is being seen all over the region.
On the debt side, Citigroup is one of the most powerful forces in the world. In Asia, the ability to offer local currency execution capabilities through Citibank, alongside Salomon Smith Barney's cross border capital markets execution is married to the option of having a back-stop loan financing provided by Citibank. This is a powerfully compelling offer for clients and it is especially potent in the volatile world of Asian markets.
Leveraging off this smorgasbord of products, Citigroup this year has completed transactions of every product description that are available in the debt markets. Local and cross border loans and bonds, in multiple currencies and in every sector. The banks has done liability management deals, asset backed deals and structured trades and is a clear leader in the world of Asian derivatives.
The bank is increasingly winning investment banking and advisory mandates from the relationships that its corporate and commercial bankers have built up over many years with the leading Asian companies. For instance, it presently has a mandate with Hyundai Electronics which involves an advisory role for future financings ? whatever product they may be. It has provided a bridging loan to the company and has been doing trade finance deals for the exporter for many years.
Its relationship with Chartered Semiconductor of Singapore also shows that repeat business comes out of a strong relationship across all product areas. Salomon did the IPO of Chartered last year and this year did the ground breaking $1 billion follow-on equity offer in May. In September, Citibank project finance did an $820 million loan for Chartered Silicon, a subsidiary of Chartered Semiconductor. In this instance, the commercial bankers were winning business from the success of the investment banks, although the overall relationship goes back many years.
In the traditional commercial banking areas of cash management, trade finance, foreign exchange, derivatives and custody, Citibank is number one or two in every product in Asia. It is knows for its continuous innovation, its dedication to clients and the quality of service it offers. It has strong and deep relationships with fine Asian companies, both large and small and is always looking to provide its clients with the services that best suit them, not the services that best serve the bank.
In many ways, imitation is the sincerest form of flattery and the Citigroup model is being copied throughout the world. The acquisition by Chase of JP Morgan and Fleming's shows that it too wants to be a universal bank. Similar efforts by Deutsche Bank and HSBC also indicate that they too want to be able to offer the breadth and depth of products that Citigroup can. Local champions such as DBS are also following this strategy albeit in a regional rather than global mould.
While stand-alone investment banks still dominate the equity and debt league tables, their lack of commercial banking skills hampers their ability to offer the overall banking relationships to which they aspire. It is something of an admission these days when the blue-chip investment banks freely boast of their abilities to provide bridging loans, something not heard of a few years ago, even if it did happen behind the scenes.
Citigroup has made the whole landscape more competitive and in the process, upped the service that clients can now expect in Asia. Chillingly for competitors, the bank feels that it is a twelve-cylinder machine only running on four cylinders at the moment. Once all the integration issues have been smoothed out, and the mandates start rolling in Citigroup will become even more formidable. Now that will be something to watch.