Citigroup’s head of Asia Pacific Stephen Bird is moving to New York to be head of the US bank consumer globally, according to an internal memo, after he helped the New York-headquartered bank capture revenues from the increasingly affluent Asian consumer.
The move partly reflects the fact that Citi’s consumer business has developed an Asian focus, with 12 out of the bank’s 24 of its consumer markets located in the region.
The Scotsman will be replacing Manuel Medina-Mora who will be retiring from the position in a few weeks. Bird will be based in New York.
Francisco Aristeguieta, currently CEO of Latin America, will succeed Stephen and become CEO of Asia Pacific. Francisco, who will move to Hong Kong, is a 21-year veteran of Citi and has deep experience in emerging markets the memo said.
Jane Fraser, an 11-year Citi veteran who currently leads U.S. retail, commercial banking, and global mortgage businesses, will become CEO of Latin America, based in Miami.
The changes become effective June 1.
Citi’s fourth-quarter results underscored the importance of the region to its global business over 2014, with Asia-Pacific ex-Japan accounting for 19% of global earnings before interest and tax (Ebit), making it Citi's largest regional contributor outside North America. China is its fastest growing market globally.
Citi’s Asia consumer banking revenues increased 2%, in 2014 underpinned by strong China and India franchises, which posted 18% and 8% revenue growth respectively.
“All the elements of the Citi model in Asia clicked in 2014. On the banking side it was a very strong year that’s reflected in increased wallet share with key clients across areas such as [mergers and acquisitions] and capital markets,” Bird told FinanceAsia after the results.
Citi has made strides under Bird in Asia. Landmarks include signing a China securities joint venture with Orient Securities called Citi Orient Securities and being among the first banks to hang out its shingle in Shanghai when the city opened its free trade zone.
Asia innovation hub
Under Bird, Citi’s consumer business in Asia has developed new banking technology and exported it to the rest of the world. ‘Project Rainbow’, Citi’s core banking platform, or the chassis of consumer banking and credit card operations, for instance was launched in Singapore.
Bird has been a driving force behind Citi’s effort to expand its branch network in China, increasing the number from 50 to 150 during the past three years.
As the bank makes strides shifting from branches to online, a trend known as ‘bricks to clicks’ in the industry - it passed 7 million digital banking users in Asia. In 2014 it set up the first mobile wallet in Hong Kong with Hutchison Whampoa’s 3.
Citi was also the first international bank to be allowed to distribute mutual funds in China.
Deposits and AUMs stood at US$247bn and US$250bn respectively by the end of the third quarter, a record high.
In a further show of how important the Asian consumer is to Citi globally, the bank named Gonzalo Luchetti as head of Asia retail banking in January. Luchetti will relocate from New York to Hong Kong and continue as global head of wealth management and insurance at the consumer bank.
Bird has also played a key role in helping Citi win key mandate from key clients such as Alibaba and Hong Kong headquartered AIA. Citi was on Alibaba syndicated loan and bookrunner for its $25 billion IPO and AIA’s initial public offering in 2010.
Its bancassuarance agreement in Asia with AIA, signed in 2013, has made progress.
To be sure there have been problems. Oversight of Japan was put directly under New York instead of Hong Kong in 2011 after Japan’s financial services watchdog the FSA grew impatient with what it saw as compliance breaches in the country. In 2011 Indonesia’s regulator sanctioned Citi's credit card and wealth management businesses over the alleged embezzlement and the death of a client after questioning by debt collectors who were acting on behalf of Citi.
Bird takes flight
Over the course of his 17 years at Citi, Bird has gained deep experience in consumer banking and operations across several geographies.
He was previously co-head of Asia with Shirish Apte, with Bird focusing on China, Hong Kong, Korea and Taiwan, and Apte concentrating on South and Southeast Asia.
Bird joined Citi in Singapore in 1998 as the Asia-Pacific head for operations and technology. In addition to his role as CEO of Citi North Asia he has been head of consumer banking and global cards in Asia-Pacific, responsible for the retail banking, credit card and consumer finance businesses.
He also served four years in Citi Japan as CEO of credit cards and consumer finance. Earlier, he was head of operations and technology for Citi Latin America.
Citi won FinanceAsia’s ‘Best Bank’ award in 2014 for maintaining the momentum of revenue growth while keeping a tight lid on expenses.
China Focus
Some of Citi’s landmark achievements under Bird include Citi and Orient Securities China securities joint venture, Citi Orient Securities. The Shanghai-based joint venture works on investment banking in the Chinese domestic market, including equity and debt securities underwriting.
The JV also underlines Citi’s continued expansion in China, where it has been growing in multiple areas. It has doubled its number of branches to 50 during the past three years, was the first global bank to issue sole-branded credit cards and has opened more than 25 Asia desks across the world to service Chinese multinational clients globally.
As a result, Citi reported more than $1 billion in revenues in China for 2011, the first time it topped that mark in the country.
When Shanghai opened its free trade zone on September 29, Citigroup was one of the first foreign banks to hang out its shingle. The US bank is opening a branch in the enclave where the Chinese government is experimenting with reform of its interest rate and foreign exchange regimes.
Foreign banks and brokers have struggled to establish money making businesses in the Middle Kingdom, partly due to the regulatory environment, local competition and lack of brand recognition.
However, Citi is profitable in mainland China and has generated more than $1 billion in revenues annually since 2011. In the past five years the US bank has increased its branches in Greater China from 50 to 150 as of late 2013.
In another milestone, Citi became the first Western bank to win approval to issue credit cards in China.
Bird served for four years as the only foreigner on the board of Shanghai Pudong Development Bank. Citi has been a shareholder of the Shanghai-based lender since 2003 and helped build its credit card business.
Bird has spent more time on Greater China than other markets as Citi works to capitalise on opportunities including the internationalisation of the renminbi and burgeoning trade flows.
Citi owns equity in one company looking to IPO. Citi bought a 20% stake in mid-sized lender China Guangfa Bank in 2006. It led a consortium that acquired 85% of the lender, including Citic Trust, China Life Insurance, State Grid and IBM. Citi still holds a 20% stake.
