Citigroup Inc. ( C Quick Quote C - Free Report) is mulling to recruit nearly 1,700 people in Hong Kong, in order to gain from the accelerating capital flows between the city and mainland China. The news was reported by South China Morning Post.
According to the CEO of Citigroup Hong Kong and Macau, Angel Ng Yin-yee, the bank plans to make hire across its business, filling the primary chunk of positions this year. The majority of it will be the people in bank’s client centric roles. The bank is also ramping up the middle and back office, in order to guarantee right product development, digital channel development and compliance procedures. Apart from this, management intends to boost its technological expenditure by 28% to grow digital offerings.
Last year, Citigroup’s consumer division in Hong Kong witnessed a 44% rise in net new money, owing to a much higher rate in the usage of digital channels by new bank account clients and credit cards compared with the pre-pandemic levels. On the investment banking front, the bank also aided clients in raising about $40 billion in equity and debt deals in Hong Kong.
Citigroup’s plan to boost its Hong Kong operations comes close on the heels of other lenders’ moves who are also hiring in the region, in anticipation of a consistent ‘homecoming’ of U.S.-listed Chinese firms pursuing secondary listing in Hong Kong and to capitalize on serving the mainland’s affluent, as China opens up its financial markets.
As reported in March 2020,
Credit Suisse Group ( CS Quick Quote CS - Free Report) also aims to triple its headcount in China over the next three years by taking full control of its mainland securities joint venture and strengthening business in the nation. Along with hiring more than 5,000 people in its wealth management unit over the next five years in Asia, HSBC Holdings plc ( HSBC Quick Quote HSBC - Free Report) will inject $3.5 billion worth capital, as announced this February. UBS Group AG ( UBS Quick Quote UBS - Free Report) is mulling to increase its stake in the China securities joint venture to acquire another 16% of the pie, boosting the bank’s control to 67%.
Citigroup’s wealth unit is also poised to benefit from the further integration between Hong Kong and other cities in the Greater Bay Area, including the intended Wealth Connect cross-border scheme. The scheme will permit banks in the city to market their wealth management products directly to the mainland clients. It follows a similar scheme for both stocks and bonds.
Plans to expand its footprint in Hong Kong will likely help Citigroup to offset the adverse impact of low interest rates on the top line. This, along with the company’s efforts to improve operating efficiency, is likely to support its profitability. Nevertheless, competition for these businesses in Asia might intensify over the medium term.
Shares of Citigroup have gained 64.8% over the past six months compared with the
industry’s rally of 60.8%.
Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see
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