| HONG KONG, July 29
HONG KONG, July 29 Citigroup plans to hire
as many as 100 bankers in a renewed push into Asia-Pacific
commercial banking, following in rival HSBC's footsteps
with a strategy that focuses on selling smaller corporate
clients a wider range of products.
Global banks like Citi and HSBC are now concentrating on
small to medium-sized clients due to a dwindling number of $10
billion-plus IPOs from Chinese state-owned companies - deals
which had sustained investment banks in the region over the last
The increase in headcount, which represents a 10 percent
boost for Citi's Asia-Pacific commercial banking unit, is aimed
at offering firms with annual sales of between $10 million and
$500 million additional services such as foreign exchange and
"This is not about adding hundreds of new clients in the
region, but winning more wallet share from commercial banking
clients who have cross-border business by providing them with
more loans, FX, cash and trade products," Citi's Asia-Pacific
commercial banking head Ashish Bajaj said in an interview.
He noted that Citi's role as joint global coordinator on
Luye Pharma Group Ltd's IPO this month
came from a commercial banking relationship with the Chinese
pharmaceutical company, saying this was an example of the kind
of deal the bank is hoping to do more of.
Citi also plans to target suppliers to major Asian firms
such as China's Lenovo Group Ltd and India's Tata
Motors Ltd and build relationships with start-ups that
have the potential to develop into large companies.
Bajaj cited the example of Indian search engine Just Dial
Ltd, a commercial banking client that had capital of
only $1,000 in 1996 but which now has a market value of $1.9
billion after listing last year.
Banking revenue from small and medium-sized companies in
emerging markets is set to grow at a rate of 20 percent per year
and could reach over $350 billion by 2015, up from $150 billion
in 2010, according to a survey by McKinsey & Company.
Citi created its commercial banking unit as a separate
entity just over two years ago, operating in 32 of the more than
100 countries in which the U.S. bank has a presence and
employing around 4,000 staff.
A source at Citi says its revenues from commercial banking
in the region last year were around $1 billion. Bajaj declined
to comment on that figure.
Although earnings figures are not directly comparable as
banks include different businesses in their commercial banking
units, HSBC's is much larger. It had profits before tax for its
commercial bank in Asia Pacific of $4.4 billion last year,
according to its annual report.
Citi also said it will begin commercial banking in Vietnam,
adding around 18 staff to the 600 it has there. It will focus on
companies from countries such as Korea and Taiwan who have
manufacturing businesses in Vietnam.
(Reporting by Lawrence White; Editing by Edwina Gibbs)