LatinFinance - November/December 2016 - 22

BANK
STRATEGY
CITI

The US bank is refining its focus as it rebalances its business in Latin
America. By Katie Llanos-Small

Jane Fraser

Metamorphosis

atin America has been a site
of transformation for Citi in recent years.
Across most of the region, the institution
is ditching a full-service model, focusing
purely on corporate and investment banking (CIB) and divesting the consumer and
retail businesses.
The metamorphosis began several years
ago, but Jane Fraser, who took over as Latin
America chief executive in June 2015, has injected fresh energy to the changes. Brought
in from a similar role at Citi's US consumer
and commercial banking business as Manuel Medina-Mora prepared to retire, Fraser
radiates enthusiasm about the institution's
direction in LatAm.
"We have a focus on our corporate and
investment banking franchise which is in
23 countries in Latin America, where we're
really the only global bank, and the only regional bank - no other bank has a presence
or a footprint like that," says Fraser.
The retreat of global competitors is helping Citi gain CIB market share in the region,
with revenues growing in double-digit terms
this year alone, she says. While some investment banking competitors argue the institution pursues new business aggressively,
Fraser says the focus is instead on strong
client relationships rather than undercutting others.
"We don't compete aggressively on price.
We see some other competitors that will
be very aggressive on price, very aggressive on assets, just to try to buy share and
get positions in league tables. That's very
90s if you're an American bank. I think we
learned that lesson a long time ago: it's re-

22 L ATINFINA NCE.COM - November/December 2016

ally about relationships with the clients."
Having divested - or in the process of
exiting - consumer and retail operations in
21 countries globally, Fraser says the next
steps for the firm are ensuring a smooth
hand-over of those assets and advancing
the reorientation towards CIB, with an emphasis on developing an internal culture.
"The other piece that's going to be important for us is culture: making sure that
the place feels personal, the place still feels
intimate for the talent that is here. That it
feels world-class. It's smaller - so how do
we get the benefits of that while at the same
time sitting on top of a very large global
bank. That culture will help us with continuing to grow."

CHAMPION FOR CHANGE: Citi's LatAm CEO
Jane Fraser

All out in Mexico
Mexico is the only country where the bank
is retaining its retail business. With the 2014
Oceanografía scandal behind it - which led
to Banamex firing a dozen staff and writingoff 2.88 billion pesos ($216 million) after
lending to the Pemex supplier against fraudulent invoices - Citi is now underscoring the
importance of the Mexican business.
For a start, it is trying to put an end to confusion over its name. (Is it Banamex? Citi?
Citi-Banamex? No longer: everything will
be rebranded to Citibanamex). But Citi also
announced a fresh injection of cash to the
Mexican business in early October, saying it
would stump up $1.5 billion, predominantly
to advance the local bank's tech capacity.
"Mexico is our largest market outside the
US in terms of revenues, it's about 10% of
Citi," says Fraser. "Mexico is very, very important for us and we see a very significant
growth opportunity for us there, but it needs
investment."
Globally, Mexico is one of just a handful of
markets where Citi will continue investing in
its retail business.
"We're focused on investing into a few
geographies where we have the scale to
compete: that's Mexico, North America and
selected markets in Asia," says Fraser. "So
Mexico is the beneficiary of the shift that
we're doing in selling our franchise in consumer banking in South America. They're
the beneficiary from the consumer point of
view and regionally the investment bank is
the other beneficiary. It's a strategy shift into
areas where we are best positioned to
succeed." LF

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Table of Contents for the Digital Edition of LatinFinance - November/December 2016