GENEVA (Reuters) - Citi Private Bank (C.N), which suffered client withdrawals during the height of the financial crisis, has seen a recent pick up in assets managed on behalf of wealthy clients, a top executive said on Monday.
But the bank has no plans to join a wave of consolidation foreseen by many in the industry, Samir Raslan, region head of Citi Private Bank for central, eastern and northern Europe, Africa and Turkey told the Reuters Wealth Management summit.
“We have had declining assets under management, either due to market action or client decisions, at least until about April,” Raslan said. “We had a pick up in the last three months.”
Clients are holding large amounts of cash, having exited risky positions during the crisis in order to preserve their wealth, but are now looking to gradually increase risk.
“They bought Treasury bills that yielded zero and were happy with that. Now they are looking to enhance that zero,” Raslan said.
Nonetheless exotic assets continue to be out of favor.
“Our clients are doing very basic investments. There is very little interest in complex investments,” Raslan said.
Liquidity has also become an important consideration for clients since the crisis, he said.
“Clients are much more aware of liquidity now. They don’t want to be forced to sell at the wrong time,” he said.
He said his bank’s business model was not under threat from the increasing pressure on banking centers like Switzerland over banking secrecy and connected disputes over tax.
“Most of our clients are from emerging markets, they are not banking in Switzerland from a tax point of view, they like the talent and the jurisdiction and they often travel to Switzerland so it’s a convenient place to bank,” he said.
Raslan said he was excited about markets such as Russia, Turkey, the Middle East and parts of Africa. “They are all high-growth markets where a lot of wealth is being created,” he said.
Citi Private Bank, which cut costs by 25 percent and staff by 20 percent as the crisis took its toll, said the bank was not looking to make any further cuts, but is considering hiring selectively in attractive emerging markets like Russia and the Middle East.
“I don’t see the need to cut costs further at the moment. We have seen revenues stabilize and begin to improve,” Raslan said.
Editing by David Holmes