Citigroup’s Japan banking head seeks expansion despite talent crunch
Besides investment banking, the firm’s other main businesses there include trading, corporate and commercial banking as well as transaction services
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[TOKYO] Citigroup is seeking to seize opportunities from Japan’s economic revival, even as the fight to get talent constrains its growth ambitions, according to the Wall Street bank’s top local executive.
The lender is pushing to expand in the country, Citigroup’s country officer Robert Nakamura said. It’s chasing double-digit revenue growth in client-driven businesses and wants to rank among the top three foreign banks across key operations in the Asian nation, the markets veteran added.
“We struggled to get attention before” from the US, said Nakamura, who has worked at Citigroup for more than 30 years and was appointed to his current role two years ago. “Now we deal with the logistical challenges of people wanting to come to Japan.”
Earnings at Citigroup’s local brokerage arm have jumped as its New York headquarters, which has been busy with a global restructuring, counts on staff in Japan to deliver stronger growth.
Japan was one of the few nations selected by Citigroup for strategic investments, including hiring more bankers for underwriting securities and advising on mergers. Besides investment banking, the firm’s other main businesses there include trading, corporate and commercial banking as well as transaction services.
Net revenue at Citigroup Global Markets Japan rose 14 per cent last year to the highest in at least a decade on the back of merger advisory and trading gains, according to filings. Net income rose 50 per cent after two years of decline.
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Still, it trailed foreign bank rivals such as Goldman Sachs and Bank of America last year in some areas, such as corporate bond and stock underwriting, according to data compiled by Bloomberg.
“We are not comfortable if we are not in the top three,” Nakamura said, adding that’s “what Citi aspires to do globally”.
Securing talent to bolster its growth plans in Japan has emerged as one of the biggest obstacles, according to Nakamura, echoing the headache experienced throughout the sector.
“It does create challenges in terms of our ability to keep up with it all,” he said. “That’s been a challenge we see across the board for all the financial firms looking to expand.”
Citigroup, which is one of the biggest foreign bank employers in Japan with a workforce of more than 1,200 people, sees hiring competition coming from private equity funds and asset management firms, Nakamura said. “There is no magic bullet,” he said. “It is a lot of hand-to-hand combat, working with resources that we have on the ground, schools that we interact with, and people that we know.”
For Japan’s bankers, who often get paid less than in other financial hubs, the tight labour market could bring welcome changes. Compensation in some areas of the business where demand is “out of whack” with supply, particularly in roles like yen rates traders and investment bankers, may be set to rise, according to Nakamura. “In certain areas, it’s inevitable that salary adjusts to demand,” he said.
Born and raised in the US, Nakamura joined Citigroup in 1993 in Japan, soon after the country’s land and asset price bubble burst.
The calm-mannered, soft-spoken engineer by training observed first-hand Japan’s “lost decades” of weak growth and on-off deflation in the following years as he rose to lead the local equity derivatives team and became head of markets in the country. Nakamura took on his current role in 2024 when the economy was starting to show real signs of a rebound, with interest rates rising.
“It has turned out to be fascinating to see this change that’s happened in Japan,” he said. While the country faces risks – from geopolitical uncertainty and labour shortages to potential energy-market shocks – “Japan has come onto the radar in a big way for many people,” he said. BLOOMBERG
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