Citi Private Banking: A Pivot In The Post-Pandemic World

As Citigroup shifts its Asia-Pacific focus to wealth management, Steven Lo, Co-Head of Citi Global Wealth Asia and Region Head of Citi Private Bank Asia-Pacific, discusses the bank’s new growth strategy as the pandemic reshapes the industry.

For Steven Lo, Citigroup’s announcement in April that it would exit retail consumer banking in major Asia-Pacific markets was not a retreat but a repositioning for future growth.

The U.S. bank said it would focus on wealth management in one of the world’s fastest-growing regions. According to McKinsey data, personal financial assets in the Asia-Pacific totaled US$34 trillion at the end of 2019, representing compound annual growth of 10% since 2014, about twice the 5% to 6% pace in Europe and North America over the same period. Managed assets account for only 15% to 20% of the total, signaling enormous potential.

Lo and his team, which has expanded with the recent formation of Citi Global Wealth by combining Citi’s Consumer Wealth and Private Bank businesses, expect to more than double their current staff of 1,765 by adding more than 2,300 positions across the platform by the end of 2025. Their aim is to secure a high proportion of unmanaged assets in the region and make Citi one of the top wealth management banks in Asia-Pacific.

He notes that the challenges facing the industry are not limited to the Covid-19 pandemic, and that their impact on global growth requires new strategies to overcome. “We have been in Asia for a very long time, since 1902, so exiting consumer banking in 13 markets was not a simple decision,” Lo says.

Focusing on wealth management makes sense given that it is a “superfast growth area in the region,” according to Lo. Citi will establish four “wealth hubs” outside its core operating area of North America: Hong Kong, Singapore, the UAE and London. Lo, who has been at Citi for 30 years, says the new direction is exciting. “We have a lot to offer, and we can win in a big way.”


Private bankers have to account for the different investment preferences within Asia-Pacific, Lo points out. “Chinese investors are very comfortable with risk and willing to [be] overweight in equity,” he says, adding that Hong Kong and Taiwan investors have similar preferences. “They understand that much better than anything else, however, we have [also] seen growing interest in other asset classes such as fixed income and alternatives such as hedge funds and private equity.”

But in Southeast Asia, Lo notes, foreign exchange is a key preference, reflecting the export-oriented nature of some countries. “If you are in Indonesia, you know the rupiah, but the nature of your business may require exposure into Australian dollars or Canadian dollars, for example. People really know their currencies there,” Lo says, adding that crafting a portfolio for an individual client means “we have to look into the local flavor.”

Citi Global Wealth starts with clients having a minimum of US$200,000 to invest and extends all the way up to the region’s billionaire tycoons. While asset allocation is an important consideration in wealth management, Lo explains that its benefits are best enjoyed when a more substantial amount, say US$10 million, is available to work with. “Although US$5 million sounds like a lot of money, you can’t do any meaningful asset allocation as the amount limits how much you can actually diversify,” he says.

However, clients with US$10 million to invest “would be in a position to make good use of our capabilities,” Lo says, as Citi’s global reach comes into play at that level. “They demand more sophisticated financial help and tend to have a global perspective. They might be thinking about major real estate in London, [and] see the Citi franchise as highly coordinated and well positioned to help them achieve their financial goals.”


Under Citi’s new direction, Lo says the key segments of its banking operations, including Citigold Private Client and Citi Private Bank, are linked in a kind of natural progression as clients’ wealth grows. “In the past there was a drop off point where clients left, so by unifying the whole platform we would have a higher degree of client retention as they climb the wealth ladder. That’s the beauty of an integrated network,” says Lo.

In addition to the clarity that an integrated network would provide, Lo says private banking clients appreciate that, on top of the products and services they enjoy at the private bank, they can also access other parts of the bank to “create a total solution.”

Through its Citigold level, the bank seeks to “capture the flow of our customers at the early stage of their wealth creation cycle,” which also enables Citi to train its younger employees on more straightforward portfolios, Lo explains. “We allow them to learn the true meaning of being a wealth adviser.”

Lo says Citi’s two Asia-Pacific “wealth hubs”—Hong Kong and Singapore—will cater to different client groups. “Hong Kong will continue to be able to capture the flow of newly minted multi-millionaires from North Asia,” and China-related capital market activities will continue to take place in Hong Kong. This flow should not be surprising since Hong Kong has become a major capital markets hub in the region.

Many potential clients operate in the technology sector. “If you look at recently listed companies from China which have been in the news, they are mainly on the technology side where you can command a much higher [price-to-earnings] ratio, which translates into a much bigger initial public offering,” says Lo. Many such companies desire a presence or tie to Silicon Valley, and Citi is “one of the few banks here that can provide a link to the U.S., and that’s a really important connection for them.”

While Hong Kong remains “highly Chinacentric,” he says, other economies are more important for Singapore. “Indonesia is a fairly important trading partner for Singapore, as is Malaysia, and for Australia and New Zealand clients, Singapore is where the first stop is going to be.” Singapore will also see more family offices as its “government makes things a lot easier for family offices to set up there,” he adds.

If you’re in the banking industry, it’s not about how much studying or reading you have done. The real value comes from apprenticeships, what you learn from people, that in-person dialogue. I’m missing that.”

– Steven Lo, Co-Head of Citi Global Wealth Asia and Region Head of Citi Private Bank Asia-Pacific


Lo acknowledges that the past year has been intense. The “new normal” stemming from the pandemic has prompted many questions from clients. With the prospect of interest rates rising, fixed income could go out of favor, and “the conversation has changed to what we can do to hedge loan exposure,” he says. In addition, “more clients are asking about cryptocurrency.”

Lo’s short-term goal is to steer the private bank through Covid-19 and into the post-pandemic era. He says his own travel and client interaction has dwindled, but the biggest effect is on junior staff, who work at home, often in Hong Kong’s tiny apartments. “When we allow people to come into the office, I give priority to our junior staff. They are so happy,” Lo says. That said, he is impressed at how clients have adapted to the new normal. “I have clients in their 70s telling me to arrange a Zoom call,” he says with a laugh.

Despite his team adapting to work within pandemic-related restrictions, Lo maintains that private banking is a deeply personal endeavor. “I’m a believer that if you’re in the banking industry, it’s not about how much studying or reading you have done. The real value comes from apprenticeships, what you learn from people, that in-person dialogue. I’m missing that,” he says. “We have to get people back to the office: human interaction, that’s the endgame right there.”

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