With an estimated $230 billion of client assets globally (Source: Scorpio Partnership), the private banking arm of the Wall Street firm has been expanding its footprint in its domestic market, as well as overseas. In May last year, Peter Charrington, the private bank’s chief executive in North America, said around 100 bankers would be hired over the next few years. A large number have already come on board.

So how do things look at Citi in the early spring of 2011 in a world still fretting about geo-political turmoil (Libya, Bahrain) and uncertainties about growth, inflation and government debt? Family Wealth Report recently interviewed David Bailin, managing director and global head of managed investments, at the firm’s offices in Midtown, New York City.

“The private bank is full square in what Citi does. It is no longer a little brother or little sister organisation,” Bailin said.

“To do that transition in three years, which is what may not be the most profitable model but it is certainly the most client-centric model. We want to be seen as the partner of the client and we don’t need to go out to own as many assets as possible,” he said.

Citi, like some of its peers such as Credit Suisse, is not shy of defending the fully integrated banking model from those who might argue that it can create conflicts of interest. As far as such banks are concerned, the key issue is to be as transparent with clients as possible. At Citi, the private bank’s clients – requiring at least $25 million of investable assets – can and do get the benefit of institutional-level pricings in deals, as well as wide access to the expertise of the IB in areas such as IPOs, corporate finance, forex hedging and wealth structuring. It is a combination, Bailin says, that can meet the demanding requirements of its wealthy clients.

A journey

Three years ago, Citi decided to restructure its operations to serve clients with a singular focus in three core businesses – transaction services, securities and banking (which includes private banking), and regional consumer banking.

To give a flavor of how international this private bank has become, Bailin said that 75 per cent of its business is “non-US”.

“Clients who come here and do investments with us are getting a pretty extraordinary range of services compared with what was the case in 2007 when we focused more on product,” he said.

“That strategy backgrounds and consistency in terms of a team-based culture. If you think you know it all, you are not listening to the client. We learn a huge amount from our clients. They have often made a great deal of money doing extraordinary things, changing whole industries,” Bailin added.