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As Citigroup Inc. moves to shed most of its consumer banking operations across Asia, it is planning to scale up in what it sees as a more lucrative endeavor: serving the rising numbers of wealthy entrepreneurs and their businesses in the region.

The New York-based bank intends to recruit 1,100 private bankers and relationship managers as well as 1,200 technical and operational staffers in Hong Kong and Singapore, as part of a plan to grow assets under management for clients in Asia to $450 billion by 2025, according to Peter Babej, CEO of Citi Asia Pacific.

That represents a 50% increase from the roughly $300 billion that Citigroup currently manages for wealthy people in Asia. Achieving the new target won’t be easy; Citigroup’s assets under management for such clients grew just 18% from $255 billion in 2015. Other global banks, including JPMorgan and HSBC Holdings PLC, are also trying to get a bigger share of the same market, particularly in China.

“It’s a very bold move, a decisive move and a difficult move," Mr. Babej said in an interview on Friday. The 57-year-old longtime investment banker, who started running Citigroup’s Asia operations in October 2019, oversees a region that is the bank’s largest revenue and profit contributor outside of North America.

The third-largest U.S. bank by assets has long been the only American company with a sizable retail banking network across Asia. Citigroup also has a full-fledged institutional business that ranges from investment banking and corporate lending to treasury and trade solutions. Each quarter, the bank’s Asian network handles transactions totaling about $30 trillion, according to Mr. Babej.

On Thursday, Citigroup said it would exit its consumer franchises in 13 overseas markets, 10 of which are in Asia. They include mainland China—where the bank has had branches since 2007—India, South Korea and Australia. That means Citigroup will divest most of its 223 branches and 17.2 million individual accounts across Asia.

“There’s some areas where, increasingly, you just need so much scale and you can’t play in all of them," said Mr. Babej.

Citigroup will maintain consumer-banking operations in Singapore, Hong Kong, London and the United Arab Emirates, the bank’s wealth hubs. Mr. Babej declined to detail how the firm intends to exit its consumer operations in the other markets, saying the bank sees no need to do a fire sale of those assets.

“We’ve got enormous value in these franchises, and great demand from other parties," Mr. Babej added.

The strategy shift is one of the first big changes under Citigroup CEO Jane Fraser, who took the top job at the firm last month. In January, the bank said it would combine its private bank that targeted ultrarich individuals with more than $25 million in assets and a wealth-management business for individuals with up to $10 million in assets. The two were previously run separately, and the combination would also enable Citigroup to cater to clients that fall in between the two groups.

“You’ve got to pick your spots and really focus on the things where you have unique advantages," Mr. Babej said. “Asia has the biggest growth potential across the world. For the firm, it’s critical to get Asia right," he said.

The region has a disproportionately high percentage of the world’s ultra wealthy individuals and is benefiting from an expanding middle class and rising affluence, thanks to faster-growing economies and the emergence of numerous startups whose valuations have multiplied quickly. Half of the world’s unicorns, or private companies valued at more than $1 billion, are in Asia, according to the Hurun Research Institute.

By doubling down on wealth management, Mr. Babej hopes it could yield the bank more institutional clients too, and “change the entire client relationship from a more transactional one to a lifetime partnership-type relationship," he said.

Asia accounted for 18% of Citigroup’s global operating income from institutional clients in the first quarter, thanks in part to stock and bond offerings that its investment bank arranged for many Chinese companies that raised funds offshore. At times in the past, Asia’s contribution has topped North America’s. As of Friday, Citigroup, alongside other international and regional banks, raised close to $100 billion for clients in Asia in stock and bond sales this year, up 25% from a year earlier

The consumer business in Asia, in contrast, has been less profitable and has contributed a smaller proportion of Citigroup’s operating income. The 13 consumer markets that it is exiting generated zero net income for the bank in 2020.

Even though it will exit consumer banking in mainland China, Citigroup sees much of its growth in Asia coming from the world’s second-largest economy, which is increasingly opening up its financial sector to foreign financial institutions.

Last September, Citigroup was awarded a domestic fund custody license that allows it to service asset-management clients in China. It also recently exited a local securities joint venture in which it held a minority stake.

“China is hugely important to us," said Mr. Babej. He declined to comment on the bank’s next steps in the country.

Internally, Citigroup has decided to make further inroads in China, and the bank intends to submit applications for licenses that would enable it to trade securities and futures and underwrite stock and bond sales on the mainland, according to a person familiar with the matter.

This story has been published from a wire agency feed without modifications to the text.

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