View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
February 2, 2009updated 04 Apr 2017 3:57pm

A return to suitcase banking?

Citi Private Bank is scaling back its domestic private banking operations in Australia and focusing on providing more client services from Singapore. The bank cut up to 150 jobs in its Asia-Pacific wealth management business at the end of 2008, according to local press reports, and has since relied on suitcase bankers from Singapore to meet clients in Australia, according to a PBI source The strategy, which involves flying relationship managers out to meet clients in territories where a bank has little footprint, is typically used by wealth managers in emerging markets but is rare in more established wealth centres.

By William Cain

Citi Private Bank is scaling back its domestic private banking operations in Australia and focusing on providing more client services from Singapore.

The bank cut up to 150 jobs in its Asia-Pacific wealth management business at the end of 2008, according to local press reports, and has since relied on ‘suitcase bankers’ from Singapore to meet clients in Australia, according to a PBI source. The strategy, which involves flying relationship managers out to meet clients in territories where a bank has little footprint, is typically used by wealth managers in emerging markets but is rare in more established wealth centres.

 Australia. Top five private banksA Citi spokesman said the term was not appropriate for its bespoke ultra high net worth offering and insisted the bank maintained a presence of “three to five” private banking staff in Australia. But he admitted recent restructuring meant some Australian client adviser functions had been shifted to its Singapore Investment Centre, where it had previously been based exclusively in Australia.

“Citi has been in and out of the Australian market for years,” said the source.

The source added: “It means they do not have people on the ground and have pulled out of having local people here.”

Restructuring paying off

The Citi spokesman said the Australian unit had been reorganised to leverage its global capabilities and that it was “already experiencing positive results”.

“Citi is committed to its private banking business in Australia,” he said. “We continue to serve ultra high net worth clients who need global solutions in capital markets, alternative investments, trust and estate planning and other advisory services for their wealth management needs.

“Citi Private Bank’s unique approach in the Australian market appeals to this segment because they seek investment strategies for a globally diversified portfolio.”

Citi focuses on clients with assets of $50 million, though it has a ‘sweetspot’ of closer to $250 million and caters for 30 percent of the world’s billionaires. It has $260 billion in assets under management across Asia.

Citi emphasises the strength of its global platforms based in London, Singapore and the US and its “best-in-class open architecture approach”, offering innovative products and access to a powerful capital markets business. On a global basis its adviser-to-client ratio is understood to be between 15 and 20.

The Citi move comes after tough competition in the Australian private banking market from global counterparts Credit Suisse, UBS and Deutsche Bank and domestic players such as Macquarie, the Australian investment bank.

Smith Barney, the brokerage business, is Citi’s other main focus in the Australian wealth market. It was recently transferred to Morgan Stanley as part of the $2.7 billion deal which saw the US investment bank take a 51 percent controlling stake in a new joint venture, Morgan Stanley Smith Barney.

Wealth management at Citi, which includes Smith Barney and the private bank, was the bank’s most profitable business in 2008, registering a profit of $1.1 billion, 45 percent down from the year before, compared to an overall bank loss of $18.7 billion (see PBI 244). It suffered assets under management net outflows of $26 billion in 2008, a 1.5 percent reduction of its total 2008 AuM.

William Cain

For Private Banker International’s Australia country survey, see Australia: growing old gracefully

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Wednesday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Private Banker International