Farhan Faruqui, Citi’s head of global banking for Asia-Pacific, has left the US bank to join ANZ as its chief executive of international business.
Faruqui, who has been with Citi for 23 years, has held various senior management roles in Europe and Asia, and will join the Australian bank in August, based in Hong Kong.
In an internal memo unveiling the news, Citi said that new leadership would be announced “in the next few weeks”.
An evaluation process has started involving Stephen Bird, Citi's CEO for Asia-Pacific, and his global corporate and investment banking partners.
“Farhan has been considering this change for some time. He feels the time is right for him to move on to the next stage of his career,” the memo said, written by Raymond McGuire, Citi’s global head of corporate and investment banking.
Faruqui leaves a big hole to fill for Citi, having played a key role in the bank’s improving performance in the region.
At the time he took his last role for Citi in 2009, the bank ranked 4th in the Dealogic M&A league table for Asia-Pacific, 9th in ECM and 3rd in DCM. At present Citi ranks 1st for DCM, 3rd in M&A and 6th in ECM year-to-date.
Faruqui’s move is a coup for ANZ, Australia’s third largest bank by market value, which has been expanding in the region and is present in 15 Asian markets.
Mike Smith, ANZ CEO, has been pushing to diversify the bank’s revenues into faster-growing markets, his so-called super-regional strategy. A recent ANZ report estimated that the Asian financial system was on track to be bigger than the US and Europe by 2030.
“This is a tectonic shift in the financial landscape,” Smith said at a briefing in Hong Kong to explain the report’s findings. “Our whole super-regional strategy is about taking advantage of this opportunity. We have to support our customers as trade, investment and wealth flows increase across the region.”
ANZ’s bet on Asia looks like it is finally paying off.
At the start of May, when ANZ reported first-half results, the bank said it wanted to double the amount of profit from its Asian operations to about 30% by 2017. First-half profit from ANZ’s Asia-Pacific, Europe and America business jumped 43%.
Faruqui will have a lot of clout at the Melbourne-headquartered bank. The heads of international banking in Australia and New Zealand, as well as country heads in Asia, the Middle East and the US, will all report to him, according to a statement from ANZ.
He will in turn report to Andrew Geczy, CEO international and institutional banking and another former Citi banker.
“Attracting a person of Farhan’s calibre highlights how far we have come in building a strong international franchise that is now a serious competitor to the global, regional and local banks operating in the region,” Geczy said in the statement.
Faruqui will spearhead the bank’s implementation of strategy in Asia and will be heavily involved in pursuing full banking licenses in Myanmar and Thailand, where the bank only has representative offices at present. He will also be involved in ANZ’s acquisition strategy within the region.
ANZ has a number of minority stakes in banks around the region, including a 20% stake in China's Shanghai Rural Commercial Bank. “We’d like to look at acquiring a majority position in certain cases where that makes sense, but often the regulators prevent us from getting to a majority position,” Geczy said at a briefing in Hong Kong.
ANZ has looked at making various acquisitions to turbo-charge its regional strategy, including Aozora in Japan, Korea Exchange Bank, and various Hong Kong-based, family-owned banks.
However, it has walked away from the negotiating table in each case as Smith decided the price was too high to create value for its shareholders.
“We continue to look for opportunities,” said Smith at a briefing in Hong Kong earlier this year. “Banks in Hong Kong are generally valued on history, i.e. the value of their Hong Kong dollar deposit base rather than what they can provide in way of renminbi deposits in the future,” he added.
Instead, ANZ has pursued mainly organic growth focused on corporate banking. ANZ increased overall market penetration within Asia to 41%, up from 28% a year ago, according to the 2013 Greenwich Associates corporate banking study, to become the fourth biggest corporate bank in Asia.
ANZ’s progression from outside the top 20 six years ago has been among the fastest in the history of Greenwich Associates’ Asian Corporate Banking Study. The study polls about 500 of the largest companies in Asia, with sales turnover of more than US$750 million.
The bank is also selling some assets as the advent of Basel III has made holding some minority investments too expensive. It is in talks with Japan’s Mizuho to sell it a 39.2% stake in Indonesia’s Panin, according to people familiar with the deal. It is also looking to exit its joint venture with Cambodia's Royal Group, called ANZ Royal. ANZ has already sold its 9.6% interest in Sacombank in Vietnam in 2012.
“We got out of a relationship in Vietnam and I’d like to do the same in Cambodia. I’d much rather have a wholly owned business in these places,” said Smith at the briefing. “But other than that, if there is a regulatory reason, we have to continue to run with what we have and Malaysia and China fall into that bucket.” ANZ also owns 17% of China's Bank of Tianjin and 24% of AmBank Group in Malaysia.
Faruqui’s career path
Faruqui has been based in Hong Kong with Citi since 2005, when he assumed the regional role of head of global loans and leverage finance. He also oversaw Citi’s infrastructure and energy finance for the region, and fixed-income capital markets in Asia-Pacific.
In 2008 he was promoted to corporate and commercial bank head of Asia-Pacific and oversaw the merging of Citi’s corporate and investment banking operations in the region in 2009, when his title also changed.
Before moving to Asia, Faruqui was regional corporate banking head for Central Europe and CCO for the Czech Republic. He has also held a number of senior management roles in Africa, including head of regional corporate finance for Africa.
