Citigroup to add jobs in Asia; cuts loom elsewhere
Citigroup to add jobs in Asia; cuts loom elsewhere
![](https://www.livemint.com/lm-img/static/default/newmintdefault-621.jpg)
Ben Richardson and Luo Jun/Bloomberg
Shanghai: Citigroup Inc. chief executive officer Charles Prince may add more than 10,000 employees in Asia through acquisitions, as the biggest US bank presses for growth in some of the world’s fastest-growing economies.
Citigroup has announced plans to buy Bank of Overseas Chinese in Taiwan and Tokyo-based brokerage Nikko Cordial Corp. The company also is hiring about 1,000 people this year to increase its corporate, consumer and investment banking businesses in China, Prince said.
“When we expand through acquisition, people come along with that," Prince said today at a press briefing in Beijing. “We get lots of great people through transactions."
Prince is under pressure from shareholders because Citigroup’s stock is trailing competitors and expenses rose twice as fast as revenue last year. Prince named Robert Druskin chief operating officer in December and asked him to find ways to cut costs by the time the New York-based company reports first-quarter earnings next month.
Citigroup generates about 20% of its profit from Asia, compared with 41% at London-based HSBC Holdings Plc. Prince has said he wants to generate more than 60 % of earnings from outside the US, up from 45% last year.
“We have very strong growth throughout the international space, both in the emerging markets and in selected developed markets," Prince said on 29 March. “Expansion in Japan should be very good," he said, referring to the proposed $13.4 billion purchase of Tokyo-based Nikko Cordial.
Trailed peers
Shares of Citigroup trailed Bank of America Corp. and JPMorgan Chase & Co. for the past five years as the company’s profit growth lagged behind its two biggest US rivals. Citigroup’s stock climbed almost 7% during the past 12 months, compared with Bank of America’s 10.4% advance and JPMorgan’s 15.1% gain. Shares of Citigroup are down 8.5% this year, closing at $50.96 on 28 March in the New York Stock Exchange composite trading.
Citigroup will cut more than $1 billion in costs this year to boost profit growth and the stock price, said a person with direct knowledge of the matter in January. As part of the plan, the company won’t replace employees when they leave, said Manuel Medina-Mora, Latin America chairman and a member of the company’s management committee, in an interview last week in Mexico.
Prince then said on 26 March that Citigroup doesn’t have a “formal process by which we simply don’t replace people who are leaving. You have to be more flexible." Prince has declined to comment on a report in the Wall Street Journal that the company will eliminate 15,000 jobs, or almost 5 percent of its workforce.
Buyout Attempts
Citigroup’s operating expenses jumped 15% to $52 billion last year, while net revenue rose 7% to $89.6 billion.
The company is pursuing the takeover of Nikko Cordial, Japan’s third-largest brokerage, to add about 12,000 employees, more than 100 branches and 30 trillion yen ($256 billion) of clients’ assets in Asia’s biggest economy. The takeover is opposed by David Herro, chief investment officer at Chicago-based Harris Associates LP and one of Nikko’s biggest shareholders, who says the offer is too low.
Citigroup also is close to buying Taiwan’s Bank of Overseas Chinese, the country’s regulator said in a 13 March interview. Bank of Overseas employs about 2,000 people, data compiled by Bloomberg show. The purchase would give Citigroup 55 branches on the island, where the government won’t allow any new outlets to be opened as it encourages mergers in the industry.
‘Unparalleled promise’
Taiwan’s economy grew 4.6% last year, while China expanded 10.7%, the fastest among the world’s major economies. Citigroup has about 3,000 people working in China and plans to increase that figure by about a third.
“China stands out as a country of unparalleled promise," Prince said. Citigroup will continue to build “‘our investment- banking business in China," he said.
Zhao Jing joined last year from Morgan Stanley to head the China investment banking team. The firm hired Eugene Qian from Deutsche Bank AG this week after recruiting Zhang Wendong from UBS AG in January.
Citigroup will continue to invest in its partners in the country, Prince said. The bank , which led a group in December that bought 86% of Guangdong Development Bank, plans to raise its stake in Shanghai Pudong Development Bank to 19.9% from 3.78%.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
![footLogo](https://www.livemint.com/lm-img/img/static/sep-story.png)