Citigroup unit taps Chinese millionaires
Citigroup's private banking business in China has the potential to contribute about 20 per cent of the US bank's overall revenue in the country, an executive said at the launch of its first mainland private bank office yesterday.
Todd Thomson, Citigroup global wealth management chairman and chief executive, said private banking accounted for 20 per cent of the overall net profit of its Hong Kong business and the bank hoped the same would happen in the mainland.
The new office in Shanghai, which will have a staff of 20 by the end of the year, will offer approved foreign currency products to Chinese and foreign residents and approved local currency products to foreigners. It aims to serve clients with a net worth of at least US$10 million.
'In 10 years or probably less, we may be witnessing Asia's single largest market in terms of investible assets among the high net worth population,' said Mr Thomson, citing China's high savings rate, entrepreneurial culture, and the swift modernisation of its banking sector.
The Merrill Lynch-Capgemini World Wealth Report 2005 says there are at least 300,000 mainland millionaires in US dollar terms.
The country was also ranked by the Boston Consulting Group Global Wealth Report 2005 as one of the fastest-growing markets in the world, with total assets under management expected to increase to US$1.73 trillion by 2009 at a compound annual growth rate of nearly 14 per cent.
China's annual gross domestic product growth has been around 9 per cent for the last few years.
Citigroup's chief executive for China Richard Stanley said the company would continue to expand the coverage of financial services on the mainland and hoped to establish more offices in China with regulatory approval.
'There are many opportunities for synergies between the private bank and our existing operations in China,' Mr Stanley said.
Citigroup Private Bank manages about US$60 billion in clients' assets in 11 countries.
