Taipei Times (TT): How do you see banking activity across Asia this year?
Jan Metzger: On a macro level, the region’s fundamentals are strong and Asia’s GDP growth levels are the envy of the world. Citi is bullish on the growth prospects in Asia where large multinational companies look to expand their presence, capture new market segments and build new global supply chains.
Asia in many ways is the time machine to the future. It is home to a young population, a growing middle class and increasingly affluent consumers. There are also many start-ups and unicorns. These companies and well-established ones have rising needs for capital market financing and strategic merger and acquisition (M&A) advice.
Photo courtesy of Citi
Citi has been in Asia for nearly 120 years and in possession of competitive edges in supporting companies with cross-border business needs. The history enables us to grow deep understanding of the markets in which we operate with an exceptional network of local talent.
For example, we helped WT Microelectronics (文曄), a leading Taiwan-based electronic components distributor, become a global player through the US$3.8 billion acquisition of Canada-based Future Electronics. We served as its sole book runner in its US$341 million offering of global depository receipts (GDRs) in April this year. The offering drew tremendous interest from global investors, who are positive about WT Microelectronics’ long-term competitive advantages in the electronic components distribution ecosystem.
TT: What are your views about Taiwan?
Metzger: We are also bullish on Taiwan, which is a key market for Citi in Asia. This should come as little surprise given that it manufactures more than 60 percent of the world’s semiconductors. It is home to world-class companies whom we support with their capital raising, advisory needs and across our services and markets businesses.
Taiwanese companies play an important part in the megatrends driven by artificial intelligence, 5G, autonomous driving and energy transition in the coming years. The market has a great talent pool, technical expertise and strong market growth potential.
TT: How will Citi differentiate itself from other local and foreign banks here?
Metzger: We have been in Taiwan for 60 years and have been delivering the entire firm to our clients in each of the more than 95 markets where Citi has an on-the-ground presence, including the local market.
Our priority is to effectively and consistently harness the power of Citi’s talent, expertise and global reach to serve and support large and mid-sized companies wherever they do business and help advance their strategic objectives.
If you look at our track record in Taiwan, you would notice the diversified solutions we offer to our clients across M&A advisory, equity and debt capital raisings in a wide range of industries.
Notably, we have many repeat clients in the past decade, which demonstrates our position as the most trusted partner with a deep understanding of companies and markets to help clients achieve their transformational goals.
In fact, no other bank has a physical presence in 95 markets globally and supports a Taiwan client base of 800-plus international enterprises, nearly 1,000 small and medium-sized enterprises, and 100-plus top domestic enterprises and financial institutions.
TT: Related data showed Citi is the top player in terms of equity underwriting and investment banking in Asia. How will you keep the momentum going?
Metzger: Equity issuance has been active in the region — particularly in India, South Korea and Taiwan — which accounted for the bulk of the transactions last quarter.
Citi managed to stay relevant, thanks to its pan-Asia footprint, on-the-ground expertise and longstanding capabilities. For instance, we have helped clients in Taiwan to raise more than US$20 billion from global capital markets since 2020.
We also maintain active strategic dialogues with clients across many areas to support local companies with their global aspirations. We are not only their day-to-day corporate banking partner, but also their strategic partner of choice when they discuss global mergers and acquisitions, and related financing in the form of loans, GDRs and Euro-convertible bonds (ECBs), among other things.
TT: What are your observations regarding geopolitical tensions, global supply chain realignment and the macroeconomic dynamics that would inevitably have influences on Taiwan?
Metzger: Those issues are both old and new. They highlight the need of a banking partner with experience and, most importantly, with a truly global network and local expertise to help clients address the dynamic and evolving uncertainties across the value chain.
Globally we have been in business for more than 200 years during which time Citi has been supporting clients in Asia for more than 120 years. If you look back at different times in history, Citi has been managing clients’ risk profiles and helping them navigate through these issues. That is really core to what Citi delivers.
TT: How is Citi helping clients in the pursuit of environmental, social and governance (ESG), as well as net-zero carbon emissions?
Metzger: We are working together with our clients toward a low-carbon and sustainable economy. Over the past year, Citi supported clients in Taiwan to pursue their sustainability targets by providing financial solutions for sustainable development, such as sustainability-linked loans and ESG-linked foreign exchange operations.
Last year, Citi acted as the sole global coordinator, joint book runner and green structuring bank for Taiwan Cement Corp’s (台泥) concurrent US$385 million GDRs and US$420 million green ECBs offerings. The combo issuance represented the largest concurrent equity and convertible bond issuance in Asia in the past two years. The green ECB tranche marked the first green convertible bond issuance in Taiwan. As the green structuring bank, Citi Taiwan gave advice on the establishment of its inaugural green financing framework.
We also offer suppliers embracing sustainability the opportunity to boost liquidity and cash flow by discounting approved client receivables at preferred rates. Our clients work with third-party verifiers to independently audit, verify and track suppliers against predefined sustainability goals. Citi then rewards suppliers who meet sustainability targets with preferential discount rates.
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