Citigroup Korea plans to resurrect an earlier project to set up a retail-based securities firm.
It comes four years after financial regulators rejected an application from Citibank Korea for a brokerage business for individual customers in 2008.
“In case a chance is given, we would like to establish a retail-based brokerage unit,” Ha Yung-ku, CEO of Citigroup Korea and Citibank Korea, said during a recent interview at his office in downtown Seoul.
Citigroup Korea has been operating a wholesale-based brokerage unit, Citigroup Global Markets Korea Securities, which is focused on advisory services for institutional investors.
Ha said the group is seeking to offer wealth management advisory services for individual customers by introducing the retail-based unit.
The project will be based upon “green field investment,” under which the group will create the unit, rather than “brown field investment” to acquire a securities firm, he added.
There is a possibility that U.S.-based Citigroup Inc. CEO Vikram Pandit will pay a visit to the Financial Services Commission in early February.
Pandit might promise the group’s active investment in the Korean market during his scheduled visit to Seoul, according to analysts.
Concerning policies to strengthen the profitability of Citibank Korea, Ha hinted at the possibility that the commercial bank may choose to undergo manpower restructuring this year.
While the bank scrapped or suspended its reported move to cut the payroll through a voluntary redundancy program last month, Ha highlighted relatively lackluster efficiency in certain areas.
“Compared to other regional operations of Citigroup, we (Korean operations) are not posting high figures in sectors like cost efficiency and capital efficiency,” he said.
Stressing that Citibank Korea has to raise efficiency through reengineering which includes a variety of methods, he said the manpower restructuring “could also be carried out if necessary.”
While Ha said the bank has yet to draw up a concrete plan for the restructuring, he noted that it had not seen manpower downsizing in 2009 and 2010.
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Citibank Korea CEO Ha Yung-ku. (Kim Myung-sub/The Korea Herald) |
“The matter of raising capital efficiency is quite significant. If I had been the CEO of a bank, which is listed on the stock market, I might have already been dismissed,” he said.
He said the business environments have become not favorable to financial companies since the 2008 global financial crisis.
“Laws and systems have changed globally. In addition, we have to brace for stern regulations under Basel III,” he said. “It is time for us to find a new model for generating profits.”
Citibank has been striving to attract younger customers by launching 22 smart banking-oriented branches last year.
“Like Citigroup had introduced automated teller machines for the first time in the local market, our smart banking branches will pave the way for Korean banks to open a new era.”
The branches have more automated services with fewer employees.
Asked about the coming effect to the local financial market from the possible success of Hana Financial Group’s move to take over Korea Exchange Bank from Lone Star Funds, he forecast minimal change.
He also declined to comment on his view as to whether Hana and KEB will produce a certain level of synergy.
Meanwhile, he said Citigroup Korea has no intention to bid for the government’s coming sale of Woori Financial Group.
Ha had served as CEO of KorAm Bank which was absorbed into Citibank. He also worked as a member of the Financial Industry Development Committee and a number of deregulation committees.
He has an MBA from J. L. Kellogg School of Northwestern University and a BA in International Economics from Seoul National University in Korea.
By Kim Yon-se (
kys@heraldcorp.com)
