Scott Murdoch and Selena Li

HONG KONG, (Reuters) – Citigroup Inc (NYSE 🙂 intends to recruit around 3,000 people for its Asian institutional business within the next two years. It will also sharpen its focus in an area where consumer banking is no longer a priority, according to its Asia Pacific chief executive.

Citi’s plan to increase staff is part of its ambition to become an engine for wealth management and institutional banking in order to boost revenue. This strategy highlights Citi’s desire to capitalize on the vast wealth and economies that are already present in this region.

Citi’s institution business comprises investment banking and corporate and commercial banks units, which provide services such as trade finance, cash management and custodial services.

In an interview with Reuters, Asia-Pacific CEO Peter Babej stated that “We are talking about meat on the bone on growing our company across Asia.” Babej was the previous global head of the bank’s financial institution group.

Citi Asia Wealth Assets in Asia are estimated at $200 billion. Citi is “on track” for a $150 billion increase in client assets, according to a spokesperson, even though global markets and economic uncertainties.

This expansion by the bank of Asian institution business is in addition to plans last year for approximately 2,300 employees at its wealth management unit.

Citi stated last year that the $7 billion of capital released by divestment in consumer banks in 13 countries, 10 in Asia, was either going back to shareholders, or being invested in profitable institutional banking and wealth-management units.

Babej stated that the bank’s principal regional institutions are located in Hong Kong, Singapore and China. The 3,000 new headcount will be focused on these two areas. The current headcount of the company is not disclosed.

Babej explained, “This helps you to see the importance of the amount of capital investment that we are talking about from both a people and capital perspective.”

Citi has created one wealth management business to serve clients in the ultra-high and affluent segments. Asia’s wealth business also has hubs in Singapore, Hong Kong and Hong Kong.

“IMPORTANCE OF CHINA”

According to analysts and bankers, wealth managers in the major global banks have begun to temper their expectations about Asia after China’s crackdown on regulation and slowdown caused by COVID, which pushed clients away.

Babej said that as global growth slows down Asia also slows down. However, the relative growth in Asia is still much higher than the rest of the world.

“And that growth, which is a portfolio wealth, one that we are incredibly excited about. The global solutions that can be provided for that wealth for our Asian clients are becoming increasingly relevant.

Babej is convinced that the Chinese wealth has been built up and will continue to grow despite all of the macroeconomic challenges, uncertainty around Beijing’s “common prosperity” drive and difficulties from COVID controls.

Babej noted that even at the lower growth rates for GDP (gross domestic products), it is still something that grows much faster than in other parts of the world. She also said it was difficult to forecast the effect of the common prosperity drive on client’s international investments.

The Citi Asia chief stated that China’s economic problems and geopolitical issues would only last a few months and will not affect the bank’s overall strategy.

He stated, “We’re here in China to the long-term.” While there are questions about the macroeconomic and geopolitical situations, we believe in China’s importance long-term.

Babej admitted, however that he was not able to travel China because of the mandatory quarantine of inbound travelers for weeks as part of China’s zero COVID approach. This proved to be a problem for Citi clients and bankers.

Our clients will be more open to working over Zoom, but it is still a problem, particularly from a bank perspective.