the wonkas

8/14/2019 The Wonkas

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Company

LOGO

Citigroup Global WealthManagement

Maximizing

Performance in aCompetitive Market


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Company

LOGO Agenda

Objective

Overall Strategy

Formulating approach for each geographical region

Deploying Smith Barney

Conclusion

BCG

Consultant: Wendy


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Company

LOGO Citigroups Objective

Understandthe

environment

UtilizingAppropriateResources

Build and AchieveGrowth

BCG

Consultant: Wendy


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Company

LOGO

HNW

Affluent

CPB

SmithBarney

Strategy of Global Wealth ManagementBCG

Consultant: Wendy


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Company

LOGO

CHINA

INDIA

SOUTH KOREA

Targeted Markets

BCG

Consultant: Wendy


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Company

LOGO

Joint Ventures

Acquire Stakes inLocal Banks

Approach into China

BCG

Consultant: Wendy


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Company

LOGO Action Plan

Increase investment in local bank

2005

Acquire ownership of banks

2006/2007

Intensify Offshore Pri

2009

Liberalization

2006

BCG

Consultant: Wendy


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Company

LOGO

Undeveloped

Legislative

Framework

Restricted

Foreign Investment

Assets Locked

in Country

Undeveloped

Derivative

Market

Highly Regulated

Environment

Regulatory FrameworkBCG

BackConsultant: Wendy


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Company

LOGO High Net Worth Individuals

Demands:

Good service andintimate relationship

New and innovativeproducts

Balance between

returns and risk

Transparency andhigher disclosure

Characteristics:

Risk adverse

At initial stage of wealthaccumulation

Not receptive towesternized concepts ofwealth management

BCG



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Company

LOGO

Liberalizationin 2006

Private BankSector

Foreign BanksEntry through

Acquisition

CompetitionFrom/Among Local Banks

BCG



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Company

LOGO Citigroups Positioning

CPB cannot enter at the moment

Need to establish presence in the Chinamarket

Balance between gaining foothold andlosing valuable knowledge and expertise tolocal firm

Map

BCG

Consultant: Wendy


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Company

LOGO

Market CitiGroup PrivateBank Products through

selected branches

Tap on Smith Barneysexpertise to offer

innovative products

Approach into KoreaBCG

Consultant: Alvin


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Company

LOGO

LowInterest Rate

Private BankSector

CustomerPreferences


Regulatory Framework

BCG

Consultant: Alvin


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Company

LOGO

Intense scrutiny of

Private Banking Sector

Liberalization of

Domestic market

Tax Laws

Highly Regulated

Environment

BCG

BackConsultant: Alvin


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Company

LOGO

High Net Worth IndividualsDemands:

High-yieldproducts

Characteristics:

Professionals entrylevel private bankingclients

More knowledgeableand sophisticatedinvestors

BCG

Consultant: Alvin


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Company

LOGO Action Plan

Market

Citigroup

Private Bank

& Smith

Barney

Products

Identify &

acquire

targets to

consolidate

Intensify

Offshore

Private

Banking

Map

2005 2006 2008

BCG

Consultant: Alvin


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Company

LOGO

Organic Growth

Develop humancapital

Approach into IndiaBCG

Consultant: Alvin


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Company

LOGO

CustomerPreferences

Private BankSector

Foreign BanksEntrance intoIndian Market


Regulatory Framework

BCG

Consultant: Alvin


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Company

LOGO Demographics

Indian consumers tend to stick with theirbank

Number of High Net Worth Individuals(HNWI) in India grew at 14.6% twice that of

the world's growth of 7.3% in 2004

BCG

Consultant: Alvin


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Company

LOGO Action Plan

Grow

business

organically

Acquire

NBFC/

Develop Joint

Venture

Embark on

acquisitions

2005 2006 2009Training

Programme

BCG

Consultant: Alvin


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Company

LOGO

Offshore Banking

Consultant: Alvin


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Company

LOGO

India

China

South Korea

Singapore

Hong Kong

Offshore Banking StrategyBCG

Consultant: Alvin


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Company

LOGO

Singapore Hong Kong

Robust Regulatory

Conditions Vibrant CapitalMarkets

Strong BankingSecrecy Laws

Well-trainedworkforce

Political Stability

Offshore Banking HubsBCG

Consultant: Alvin


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Company

LOGO Strategy Overview

CitigroupPrivateBankCitigroup Global

Corporate &Investment Bank

Customer

Smith Barney Private Client

BCG

Consultant: Alvin


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Company

LOGO

Asia Potential

BCG

Consultant: Zehan


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Company

LOGO

Client Band Net Worth Citigroup PrivateBank

Smith Barney

Ultra high networth

>$50 million

Very high networth

$5 million to$50 million

High net worth $500,000 - $5

million Entry-level high

net worth$100,000 -

$500,000

CPB and Smith BarneyBCG

Consultant: Zehan


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Company

LOGO Growth Potential in Asia

1.9

2.52.2 2.1

2.52.52.3

2.62.7

1.5

2

2.5

3

millions

2002 2003 2004

Year

Distribution of HN

A sia-Pacific Europe North A meric

BCG

Consultant: Zehan


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Company

LOGO

6.0

8.0

10.0

12.0

14.0

$Trillion

s

2004 2005F 2006F 2007F 2008F 2009F

Year

Total Wealth of HNWI by Regio

Asia-Pacific Europe North America

Growth Potential in AsiaBCG

Consultant: Zehan


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Company

LOGO Competitive Situation

Market Share in As

27.03%

27.03%18.92%

13.51%

13.51%

Citigroup UBS HSBC JP Morgan Credit Suiss e

BCG

Consultant: Zehan


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Company

LOGO

CHINA

Smith Barney Potential

Consultant: Zehan


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Company

LOGO

China

Foreign Banks

R

egulations

Market Overview - China

Domestic Banks

Internal

Environment

BCG

Consultant: Zehan


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Company

LOGO

Restrictions in

Geographic locations

Restriction in direct

investments

Restrictions in

Services

1

2

3

RegulationsBCG

Consultant: Zehan


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Company

LOGO

CompetitorsDomestic banks Big Four

Foreign Banks Fast Movers

Customers

45% Tax rate

Growth trends of sophisticated

investors

Restrictions on product

offerings

Market Conditions

Labour

Education level

Wage rates

BCG

Consultant: Zehan


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Company

LOGO

South Korea


Consultant: Heng Liong


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Company

LOGO South Korea

Factorsincreasing

share of pie

South Korea

Other considerations

FactorsdecreasingShare of pie


BCG


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Company

LOGO

Factorsincreasing

share of pie

Demand

Driven by Affluence

Preference for wide range,sophisticated product offerings

Up to 40% income tax

Record low interest rates


South KoreaBCG


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Company

LOGO

Other considerations

South Korea

Compliance with heightened regulation


BCG


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Company

LOGO

India



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Company

LOGO

Libe

ralizatio

n

WTO requirements



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Company

LOGO

Restricted Offshore

Banking

Limited direct foreign

participation in private

banking

Liberalization according

to WTO requirements

Entry of foreign

banks


BCG

F C i Si f Pi


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Company

LOGOFactors Capturing Size of Pie(+)

DemandLaborCost

Savings



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Company

LOGO


Demand private client businessis relatively new to Indiacompared to the morepopular retail banking

Tax rates up to 30%

Increasing Affluence

Factors Capturing Size of Pie(+)

BCG

C


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Company

LOGO

LaborCost

Savings

according to a studydone by DT, Foreign

banks such as Bank ofAmerica are predictedto outsource two million

jobs from the West toIndia by 2008 due to

labour cost savings ofup to 40%

Factors Capturing Size of Pie(+)

BCG

C

Factors Limiting Size of


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Company

LOGO

Regulations

Factors Limiting Size ofPie (-)

Intensityof

Rivalry


C


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Company

LOGO


Foreign banks face theconstraint of limitednumber of branches

DeploymentConcerns

Workers

productivity Leverage onExisting

Infrastructure

Regulations

Factors Limiting Size of Pie(-)

BCG

C

Deplo ment


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Company

LOGODeployment

Compan


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Company

LOGO

Before 2009, alreadyhave a number of

foreign banks in India.i.e. HSBC, JPMorgan.

by 2009, one of the

worlds best privatebank UBS

Intensityof

Rivalry


Factors Limiting Size of Pie(-)

BCG

Company


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Company

LOGO

InnovationPrivate Wealth

Sector

Deregulation

Competition

Consultant: Wendy

ConclusionBCG

Citi

grou

p

Company


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Company

LOGO

Q & A Session

BCG

Company


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Company

LOGO Index

WTO

Kyoto Protocol

Market Insights

China

India

South Korea Educational Levels

BCG

Company


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Company

LOGO

Education Level in South Korea in 200

13%

12%

43%

10%

22%Primary

Middle School

High School

College

University

South Korea Education LevelBCG

Company


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Company

LOGOBCG

Company


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Company

LOGOBCG

Company


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Company

LOGOBCG

Company


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Company

LOGO Growth of targeted markets

9.10%

4.60%

7%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

China South Korea India

GDP Growth

GDP

BCG


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the wonkas

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