Citigroup Private Bank Wins Favour With Japanese HNWIs

by Carla Johnson, Investors Offshore.com

08 March 2002

According to a report in the New York Times this week, Citigroup Private Bank may finally have cracked the Japanese high net worth market, a feat which many other foreign banks have tried - and failed - to achieve.

As Merrill Lynch, Morgan Stanley Dean Witter and others retreat from offering retail finance in Japan, Citigroup has revealed that revenue from its Japanese private banking operation has grown 25% a year for four years.

Although there are many wealthy Japanese citizens, recession, deflation, and a lack of choice have meant that they are among the most cautious investors in the world. Studies have estimated that more than $10.5 trillion is tied up in personal savings accounts which earn little or no interest.

Speaking to the NY Times, Koichiro Kitade, the Director of Citigroup Private Bank in Japan put the organisation's success down to its longevity and the specialised personal service on offer for HNWIs.

The bank is also ideally positioned to take advantage of the fact that Japanese traditionally believe that US and other foreign companies are opportunistic and unreliable, and confidence in domestic lenders is slowly ebbing away as ever more of the stricken banking sector's woes are revealed. 'We provide safety, while most local banks have difficulty even maintaining their existence,' Kitade observed.

The banking chief also suggested that the level of service for investors with assets of at least 300 million yen ($2.2 million), could also be a draw for more cosmopolitan investors interested in moving away from the domestic banking sector with its tendencies towards homogeneity. 'Citigroup is private and global, so as a customer you become part of a self-selected elite,' he explained.

Mr Kitade announced that by 2005, he hopes to more than double his client list in Japan.

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