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The Korea Herald
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THE INVESTOR
March 29, 2024

Finance

Citibank shores up elite banking services

  • PUBLISHED :August 03, 2017 - 16:50
  • UPDATED :August 03, 2017 - 23:55
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[THE INVESTOR] At Citibank Korea’s Seoul Wealth Management Center, a reception area that would put any five star hotel lounge to shame greets visitors looking to tap into the bank’s wealth managing expertise.

The center is located across Gyeonghui Palace and is the biggest operated by Citibank here. It has a 90-member staff including 50 professional advisors, and on the second floor, there are 25 private consulting rooms for clients -- divided into Citigold Private Clients with more than 1 billion won (US$892,295) of assets under management, Citigold Clients with between 200 million won and 1 billion won, and Citi Priority Clients managing between 50 million won and 200 million won.

Citibank Korea opened its first wealth management center in Banpo-dong in the affluent Gangnam district in November 2015. It now runs a total of four centers, including those in Cheongdam-dong and one near Gwanghwamun. Related professional personnel at the bank has increased 35 percent since the Banpo center opened. 

The bank may downsize due to the digitalization wave, but is now moving into other strategic areas, such as the elite banking segment that usually caters to clients with affluent means that don’t quite border on the superrich. 


Citibank Korea’s Seoul Wealth Management Center



According to a recent annual survey by KB Financial Group’s research institute, Koreans with financial assets worth more than 1 billion won rose 14.8 percent on-year to 242,000 in 2016. Although those with more than 1 billion won assets represent only about 0.5 percent of the 50-million Korean population, their total wealth -- amounting to 552 trillion won -- accounts for 16.3 percent of the country’s assets.

Citibank Korea has been offering wealth management services since 1987, and its branches have been providing related services on the side. But wealth management is now the centerpiece. 


Inside Citibank Korea’s Seoul Wealth Management Center



“We’re trying to adapt to changing trends in the finance industry and client needs,” Cho Hye-yeon, center head of Citi Seoul Center told The Investor. “About 95 percent of transactions now happen outside the branch, and there’s a growing demand for wealth management services.”

Citibank clients with 50 million won to 200 million won AUM surged by more than 17 percent as of June compared to the end of November 2015. The number of high-net-worth individuals with more than 1 billion also jumped by about 12 percent, the bank said during the same period.

The total number of bank branches across the country declined from 5,768 as of end-2012 to 5,222 at the end of 2016. Banks and financial groups are now expanding wealth management services by launching independent premium brands. In February, KB Kookmin Bank launched the KB WM Star Advisors.

As competition intensifies, Citi is working to introduce more professional services to get an edge.

“We have accumulated statistical data since 1920s and created our signature Citi Model Portfolios backed by Citi’s research capacities. We also use a tool called Total Wealth Advisor, which provides clients with numerical risks and portfolio reviews by scenario,” said Cho. “This will help Korean investors who tend to rely heavily on the Korean stock market to diversify their portfolios, Cho added.

Hwang Se-yung, Director of Seoul Center who manages assets for Citigold Private Clients said the bank is striving to maintain objectivity in product selection and management.

“A team consisting of experts from each field - wealth management, investment, insurance, and foreign exchanges -- creates the portfolios,” he said.

The bank is planning to open more strategic wealth management centers including one in Bundang, just south of Seoul, as early as first half of 2018, and aims to increase the number of clients by 50 percent while doubling its AUM by 2020.

By Park Ga-young (gypark@heraldcorp.com)

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