Citigroup’s commercial banking arm will make strategic hires in Hong Kong under a newly introduced team structure, capitalising on mainland Chinese companies’ growing overseas expansion plans and foreign firms’ push in China, according to a top executive.
The US bank is hiring selectively, especially for advisory services, while grooming its existing bankers to specialise and focus on industries it has identified, said Joy Cheng, head of Citi Commercial Bank for Hong Kong.
“We make sure we provide our people with the specialty and all the market intelligence,” said Cheng, who assumed the role in February. “We are also hiring people that have corporate finance expertise to work with our investment bank.”
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Such expertise is crucial to the bank’s strategy to engage with medium-sized companies – those with US$10 million to US$3 billion in sales – early on by supporting their needs such as treasury management, trade finance, capital raising, initial public offerings, and mergers and acquisitions (M&A).
“Our focus is on offering banking products and services to mid-sized corporates that are looking for support with their international or global expansion plan or with their strategic growth objectives,” said Cheng. “The access to our full product platforms, including advisory and support from our investment bank, differentiates us from many of our competitors.”
Joy Cheng, Citigroup’s head of commercial bank for Hong Kong, says the bank is well placed to support mainland Chinese clients’ global expansion and overseas companies’ entry into China. Photo: Jonathan Wong alt=Joy Cheng, Citigroup’s head of commercial bank for Hong Kong, says the bank is well placed to support mainland Chinese clients’ global expansion and overseas companies’ entry into China. Photo: Jonathan Wong>
Citigroup was among the top five banks in terms of global investment banking revenue in the first nine months of this year, according to data compiled by Dealogic.
Cheng reckoned that with Asian companies’ global expansion gaining speed, Citigroup is well placed to leverage its international network and local expertise that spans 95 markets to cater to their needs.
She added that Hong Kong, one of the biggest markets for Citigroup’s commercial banking globally, is ideally placed to support Chinese clients’ global expansion and overseas companies’ entry into China.
While Chinese companies make up the bulk of the commercial banking arm’s clientele in Hong Kong, foreign firms’ presence in the city is growing fast. The latter segment recorded double-digit business growth year on year and more than double compared with pre-Covid levels, the bank said.
Many mid-sized corporations are setting up subsidiaries in Hong Kong to take advantage of the city’s proximity to mainland China’s sizeable economy and consumer market, a comprehensive set of yuan products and infrastructure resources, Cheng said.
The bank has seen client activities grow from sectors aligning with its five key industry verticals – digital, technology and communications, consumer and retail, industrials, business and professional service, and healthcare. The new coverage models with five verticals was initiated after Cheng took the position.
The set-up allows Citigroup’s bankers to better capture the business opportunities around a specific industry and its ecosystem, and to create synergies with the investment banking arm, which also has bankers with industry expertise, Cheng said.
Following clients’ footprints, the bank is eyeing opportunities from various corridors.
Inbound into Hong Kong, the Association of Southeast Asian Nations is collectively the best performing region for the bank with double-digit growth in business volume, according to Cheng, as technology companies in the region have expanded rapidly into the city.
The US corridor also recorded double-digit growth in client activity year on year for the bank, with companies in the professional services industry moving into the city, she added. South Korea, another important corridor for Citi commercial bank in Hong Kong, saw growth in cosmetic and healthcare companies.
“Many of them use Hong Kong to test the market and consumer interest, and attract Chinese consumers and investors before entering or selling their products in China,” Cheng said.
As the US Federal Reserve and Hong Kong Monetary Authority cut interest rates last month, clients will enjoy lower borrowing costs but remain prudent about business planning, said Cheng.
“The conversations about M&A and capital raising have never stopped. But clients, corporates are waiting to see when is the appropriate time to increase activities.”
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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