Citi’s unveiling of its largest organisational structure change in 15 years is aimed at streamlining its operating model and enhancing its strategy.
With falling revenue and frequent organisational changes to its wealth business, can Citi meet its long-term strategy of achieving strong revenue in wealth?
Under the new structure announced last week, Citi has separated its core businesses into five divisions – services, markets, banking, wealth, and US personal banking – with all five heads reporting directly to Jane Fraser, CEO.
Geographically, Citi also split its coverage into two – the home market of North America, and International. Under International, Citi has divided the regional markets into seven clusters, with APAC being separated into North Asia and Australia, South Asia, and Japan (institutional only).
Two years ago, Citi created a single wealth management organisation, Citi Global Wealth, to unify the wealth management teams in global consumer banking and the institutional clients group, with the goal of serving clients across the wealth continuum, from the affluent segment to ultra-high net worth clients.
Meet the new wealth team in Asia
Under the new structure, the US lender has eliminated the Citi Global Wealth organisation. All wealth-related businesses – Citigold, Citigold Private Client and Citi Private Bank – will now just fall under wealth.
In Asia Pacific, Angel Ng, the former head of Citi Global Wealth APAC, has now taken on the role of cluster head of North Asia and Australia, meaning she will now look after the five core businesses in that region.
Amol Gupte, the current ASEAN head and Singapore CEO of Citi, has been appointed as cluster head of South Asia. Whereas Citi APAC CEO Peter Babej has embarked on a new role as interim head of banking for the whole group.
On the wealth side, Vicky Kong, the current CEO and consumer business manager for Citibank Hong Kong, has been appointed as head of wealth for North Asia and Australia. While Citi has exited its onshore wealth business, Kong will manage offshore Australian clients’ needs.
Shyam Sambamurthy, the international head of Citigold and Citigold Private Client, has been named as head of wealth for South Asia.
Both Kong and Sambamurthy will report to the new head of wealth, Andy Sieg, whose appointment will be effective on 27 September. They will also have a matrix reporting line to Ng and Gupte, respectively.
Citi’s spokesperson confirmed the appointment and added that both Kong and Sambamurthy now have direct responsibility for Citigold and Citigold Private Client, the International Personal Bank, as well as cards, unsecured lending, secured lending in their responsible clusters. They will also have a matrix responsibility for private banking for their respective geographic clusters.
Citi does not have an onshore wealth business in Japan.
On the private banking side, a spokesperson for Citi commented that there will be no personnel movement at Citi Private Bank. It will continue to operate as a global business, with Steven Lo continuing as head of APAC, reporting directly to Ida Liu, global head of Citi Private Bank.
Who is the new Citi wealth boss?
On a group level, Citi has also appointed a wealth management veteran to oversee the whole wealth business.
In Sieg’s new role, he will manage the overall wealth management and private banking business of Citi. Whereas Jim O’Donnell, CEO for Citi Global Wealth, has taken up the role as executive vice chairman and head of senior client engagement at Citi.
Citi announced the appointment of Sieg in April after O’Donnell expressed his wish to step down earlier this year.
Sieg rejoined Citi after a stint from 2005 to 2009. Apart from Citi, Sieg worked for Merrill Lynch heading the wealth management business.
Merrill Lynch, which is now the wealth management arm of Bank of America, is one of the top wealth managers in the US market. Its AUM stood at about US$1.5 trillion in 2Q23, but they do not operate in Asia anymore.
However, Citi has not seen strong progress in its wealth business, even though the bank doubled down on boosting its wealth business as a core strategy two years ago.
Citi reported US$764 billion in client assets in its personal banking and wealth management in 2Q23. Its 2Q23 wealth management revenue was down 5% YoY. Morgan Stanley, one of its US peers in Asia, booked US$6.7 billion, up 16%, in wealth management revenue in 2Q23.
“Andy’s decision to join Citi sends a strong signal about the potential of our Wealth proposition and the attractiveness of our unique global offering. Our team is on a mission to transform Citi, and Andy will play a central role in our firm’s leadership,” Fraser commented on the appointment of Sieg.
What next for Citi?
Citi over the past few years has also streamlined its wealth business several times. While its private bank continues to see growth, the overall wealth management business will need more core strategy to keep up with its peers, not just on the US side, but also on the Asia side.
The bank made major moves in exiting consumer banking in 13 regional markets in Asia Pacific and EMEA, and it has also bumped up a lot of resources into building the whole Citi Global Wealth strategy over the two years.
But with the underwhelming wealth management revenue over the years, Fraser and Sieg still have more to do before hitting its medium-term revenue target of hitting high single digits to low teens for the global wealth management business, that the bank set at its Investor Day last year.
“Our strategy has not changed. We are always focused on growing with our clients,” the spokesperson commented when Asian Private Banker reached out on their strategy to grow wealth revenue.