Citibank Singapore to double AUM by 2025 in big wealth push

Singapore

CITIBANK Singapore aims to step up the pace of growth of its wealth business here, with ambitions to double its assets under management (AUM) and to triple the number of clients by 2025, said a top executive.

The opening of its wealth hub at 268 Orchard on Monday - Citi's largest in the world - is the bank's first "externally visible step" to reach that goal, Gonzalo Luchetti, head of consumer banking for Asia Pacific and Europe, Middle East and Africa, at Citi told The Business Times.

"This plays into one of our biggest strategic priorities in the next few years around leaning into wealth management, which we consider a significant opportunity for us across the region," he said in an interview.

This comes as Citi is "starting from a point of strength and leadership" as it is among the top three wealth managers in Asia with US$280 billion in AUM, he pointed out.

One key part of Citi's wealth strategy is the ability to serve the continuum of its affluent customers ranging from the emerging affluent to the ultra-high-net-worth seamlessly.

For instance, Citi intends to create better linkages between the private bank and the global consumer banking business, where clients can benefit from both the private bank's investment products and the consumer banking unit's scale and transaction banking capabilities, where relevant.

The ability to offer mass affluent clients the type of access to global and institutional-calibre insights from the private bank sets Citi apart, he noted. "This is one of the key things that we see as our differentiators - that we can grow with our clients as their wealth journey moves forward," he said.

Its freshly-launched wealth hub in Singapore will also be part of Citi's strategy to accelerate growth.

Citi has over 70 wealth hubs and client centres in the region to serve its affluent customers, but the new Citi Wealth Hub in Singapore is its most ambitious to date.

Singapore was selected for several key reasons, he said. For one, it sits within Asia, the world's fastest growing wealth market. "There's a confluence of events in Singapore," he said. "You have a stable, well-tested framework, under which you can operate... it gives clients the trust that you really need in the business of wealth."

There is also a strong local economy, with significant wealth sitting here, he noted. Singapore ranks within the top ten of the fastest-growing ultra-high net worth population in the world, with this group expected to grow by double digits in the next five years.

The third and final piece that makes Singapore one of the key investment markets for Citi's wealth strategy is its "access to a great talent pool", he said.

Plans for the wealth hub were set in motion long before Covid-19, and the pandemic did not sway the bank's decision on this front, he said.

While lockdowns in various countries have led to a surge in digital adoption, Citi had already been driving its "light physical, high digital" model over the past few years and seen continuous growth, he said.

Even as the bank has closed about half its branches in Asia Pacific in the last five years, deposits went up in the same period, in a sign that its strategy is bearing fruit. Less than 1 per cent of transactions are done at Citi branches in Singapore, the bank said.

In the midst of Covid-19, digital wealth transactions also went up this year. At Citi, mutual fund digital retail sales volume in Singapore more than doubled year to date, compared with the same period in 2019.

So is a physical space like the wealth hub still a necessary investment for the affluent if they can transact online? Mr Luchetti certainly thinks so. "It's about giving customers flexibility," he said. "For big decisions like insurance, clients still like being able to go in and hearing from someone they can trust."

But clients that do not wish to have this physical connection can still continue to have their needs met remotely through video chats and various other online tools, he said.

For the new wealth hub in Singapore, Citi expects to serve about 150 clients each day even with safe-distancing measures.

It will occupy an area of 30,000 sq ft across four floors at 268 Orchard Road, housing its relationship managers (RMs) and specialists under one roof to better serve customers. It has a total capacity of over 500 people with current restrictions. Without restrictions, it can accommodate over 600 people, including RMs and clients.

Including the wealth hub, Citi has 10 physical outlets in Singapore altogether, down from 14 at the start of the year as the bank consolidates its branches.

While the bank is looking at building one or two more wealth hubs in Singapore, he said the priority is to focus on getting the first one right.

To gear the bank up for future growth, Citi is focusing on its talent, said Mr Luchetti. Citi intends to hire over 330 RMs by 2025, and offer specialised training programmes for them, such as the Chartered Financial Analyst programme and the enhanced Wharton programme certification.

"A question I constantly have gotten over the last several years is whether the RM role will go away," he said. "And the answer is no - we believe that the RM will still be at the epicentre of the relationship with clients."

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