Taipei Times (TT): As the CEO of the largest network bank in the world, how is Citi supporting clients in Taiwan and around the world?
Michael Corbat: We’re focused on serving our target clients in two core franchises: our Institutional Clients Group and our Global Consumer Bank. Both are strong businesses for Citi in Taiwan, where we are the largest international bank by revenues.
In Taiwan, we serve consumers across the full spectrum of their financial needs, from credit cards to lending and saving. Whether our relationship with a customer starts with a card product or a deposit account, our goal is to deepen that relationship to include all of their payment, borrowing, saving and investment activities.
Photo courtesy of Citigroup
In Taiwan, we are proud to be a digital pioneer. We were the first to launch voice biometrics in 2016 and we are digitizing our credit-card application process this year.
Locally, in the past 12 months, we advised on the transaction in which Yageo Corp (國巨) acquired Pulse Electronics for US$740 million and when Ruentex Group (潤泰集團) sold a 36 percent stake to Alibaba (阿里巴巴) for US$2.9 billion.
TT: Citi has a strong business in Taiwan and more broadly across the Asia-Pacific region — how can Taiwan and the region support the Investor Day targets you set out for 2020?
Corbat: At our Investor Day in July last year, we laid out 2020 targets and outlined three strategic paths we would pursue to reach those financial targets.
These were to deliver sustainable, client-led growth by deepening our relationships with existing clients and reaching new clients within our targeted segments; leverage our scale and investments in technology to enhance the client experience and improve our operating efficiency; and optimize our capital base and return all the capital above the amount needed to prudently operate and invest in our franchise.
Asia is home to many rapidly growing economies that are leading to increasing consumer wealth and regional and global aspirations for Asian companies. We are well positioned to leverage these trends as Asia’s leading consumer and network bank.
The region is making important contributions to Citi’s overall story as well — in the past 12 months, we have increased revenues in Asia by more than US$1 billion by deepening clients’ relationships and being at the forefront of digital innovations.
Most recently, in the second quarter of this year, we reported earnings of US$4.5 billion and earnings per share of US$1.63, up 27 percent from one year ago.
Taiwan has made a big contribution too — with earnings up 20 percent last year.
TT: You recently announced another large capital return to investors, marking another step in your transformation. When you meet institutional investors, what is the key message you are giving them about your company?
Corbat: Citi today is a balanced and global franchise that is not overly dependent on any one client, segment, country or region. We are capturing growth across multiple engines and are poised to take advantage of additional opportunities for growth around the world.
This positioning gives us the confidence that we will continue to improve our returns through a combination of client-led revenue growth, expense discipline and significant capital return.
Over the past year, Citi repurchased about 8 percent of common shares outstanding and we recently announced plans to return an additional US$22 billion of capital through dividends and buybacks over the next 12 months.
TT: Disruption is shaking up every business. How is Citi responding to that challenge to stay relevant in Asia?
Corbat: At Investor Day we also spent a lot of time talking about the investments we are making to drive revenue growth and productivity – with the bulk of these investments focused on digital, automation and other tech initiatives. With client engagement rapidly shifting to digital channels, mobile continues to be at the core of delivering an ever simpler, better customer experience for our customers and clients.
We are building an end-to-end digital bank, which will enable us to acquire, engage, and service clients entirely though digital channels. In Asia, over half of our clients use mobile devices regularly. This rapid increase in mobile penetration has been a key factor in our decision to invest in the digital ecosystems where our customers are increasingly active.
We are also currently working to redesign our branches, introduce sweeping product enhancements, invest in our digital capabilities for our wealth management offering, expand ATM access, and accelerate speed to market across all of our digital initiatives. Another area we are continuing to explore, especially across Asia Pacific, is APIs (application programming interfaces), which provide scale and greater relevance to our clients across all of our consumer markets. We have recently opened API access for partners including LINE, WeChat, Airbnb, Amazon and Grab.
With a client base of 17 million consumer banking clients in Asia Pacific, Citi is an attractive partner to fintech companies. We view our work in the space as partnership driven and additive to the overall ecosystem and in keeping with the broader trends in financial services. Through our Institutional Clients Group we also provide banking services to many of China’s leading fintech companies and play a critical role as they expand across the world.
We are continually looking to the future and stay at the forefront of technology and innovation. One way we do this is through strategic investments made through Citi Ventures, our internal innovation engine. Citi Ventures is located in Silicon Valley and is charged with conceiving, launching and scaling new initiatives with the potential to transform the future of financial services. Our Ventures team invests in startups across a variety of sectors and leads a number of initiatives that support and incubate talent and new ideas within Citi and within the broader ecosystem.
TT: Your bank has taken the lead on many issues globally from climate change to sustainable finance and your Global Community Day is always well supported in Taiwan. What issues are important to Citi in the coming decade?
Corbat: At Citi, we have a clear mission that goes beyond just providing responsible financial services to our customers and clients. We’re dedicated to enabling progress and growth around the world, and as such, we become involved in issues that lie at the core of our value as a firm and are important to our people. Increasingly, we are seeing our colleagues around the world express interest for an open dialogue around how we approach the issues and topics where we do take a stand.
At the same time, our customers are also more engaged than ever before and have clear expectations of their business partners. I’ve been pleased and encouraged by these shifts and look forward to continuing the dialogue and engagement within our firm and with our clients and partners.
One area I would like to continue to highlight is our commitment to being an inclusive company and one where our colleagues can bring their true, full selves to work each and every day. However, as more than 50 percent of our colleagues globally are female, we recognize there is still work to be done to grow senior-level female representation. We were the first in the industry to disclose the results of our gender pay analysis and our plans to address the small discrepancies that were uncovered. We have recently announced global representation goals for female colleagues. These goals—which represent a starting point, not an end state—will help us continue to drive progress as a firm. We look to our franchise in Taiwan as a great example of diversity at Citi. Over 70 percent of our employees here in Taiwan are female and the management team is over 50 percent female.
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