Taipei Times: Can you tell us a bit about the Fubon-Citibank strategic partnership?
Baumann: Fubon-Citibank strategic partnership was different from what is usually talked about in the press in terms of merger activity and consolidation activity. That wasn't really our goal, our goal is to create a partnership to expand the ability of Citibank into different product sets in which we were not active in the past. It is not a consolidation-type of opportunity. Consolidation or the bank merger is really about expense saving. But that is not what we are talking about here with Fubon. We are talking about a partnership to expand the opportunity for both of us, which is actually, in a lots of ways, similar to the merger almost three years ago between Citicorp and Travelers' Group.
It is not a merger of banks, but a merger of complementary businesses to expand the product sets and opportunities for both of our customers. Obviously, it is a partnership, it is not an acquisition or a merger. We have only acquired 15 percent and so it is not a very typical or traditional type of buy-out or merger consolidation.
So when you look at that and try to really understand the transaction, what we were looking for is typically to expand our participation in the insurance business and asset management business here in Taiwan. The banking business is well-represented, and as for the securities business, we had a very different business focus from Fubon. We have Salomon Smith Barney which really focuses on the international side as opposed to Fubon, which really focuses on the domestic side of business.
TT: How can you leverage Citibank's market strength to make the most of the Fubon alliance?
Baumann: The real opportunity is to use Citibank as a distribution channel for Fubon products. So the most traditional products that can get sold through banking channels are insurance products and asset management products. So we took our two very small businesses -- insurance and asset management businesses -- and merged them into Fubon's asset management and insurance businesses, respectively.
We are now selling Fubon products through our consumer banking channels to a million Citibank customers, mainly card holders and account holders. We want to leverage our distribution channels as much as possible. Selling as many products as possible. And then -- when we figure out how to do this in Taiwan -- then we will take this model overseas to a handful of other countries in South East Asia to expand our businesses.
TT: What other countries where you are interested in moving to?
Baumann: We have a list of countries and we are looking at different opportunities. In Hong Kong, we are working on a joint venture to start up an insurance business. We are looking at opportunities in Malaysia, Thailand, [China] and we will go from there.
TT: How about China -- you want to go there through Citibank Taiwan?
Baumann: No, we have a separate organization. And we don't manage our businesses in a Greater China type of organization.
TT: So far the integration is going well?
Baumann: It seems to be going very well. When we look at the volume of the products that we were able to push through the consumer bank channels, it is encouraging to see that our customers do get a selection. We are trying to push Fubon products through our channels.
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