Citi Private Bank North America has been busily hiring to boost its headcount and the recruitment drive will continue as the firm positions to scale up its operations in key market segments, CEO Peter Charrington has said in a recent interview.

Hiring continues apace at Citi Private Bank North America, which has recruited six new private bankers, one top executive and two investment counsellors in the last two and half weeks alone.

And don’t expect a slowdown anytime soon, chief executive Peter Charrington told Family Wealth Report in a recent interview. (FWR is the North American sister publication to WealthBriefing).

At least 100 new private bankers are to be hired over the next few years, bringing the private bank’s ultra high net worth group, which targets investors with a net worth of at least $25 million, up to 230 to 250 bankers from its current total of 130, said Charrington, who marks his first year on the job next month. In his previous role, he was head of Citi Private Bank’s business in the UK, Israel and Monaco.

More bankers will also be hired to beef up Citi’s 50-person law firm unit, which targets the legal profession.

“We’re looking for the right talent who are private bankers at heart, can thrive in an institutional bank-based culture, understand how to work as a team and can bring those resources to the client,” Charrington said. “We want people who will be with us for a long time. This is not a short-term trade.”

He would not reveal details about what kind of compensation Citi is offering to lure bankers in a sellers’ market, but did say he was paying “competitively to recruit the best talent.”

The banks’ priority is to “scale up” the New York office and build up its west coast presence in existing offices in San Francisco, Silicon Valley, Los Angeles and Orange County under the direction of Tracy Warson before opening new locations, Charrington said.

Citi is also targeting build-ups in Chicago and the southwest and has hired Mike Smith to start recruiting talent in Chicago next month, while Mark Connally will open up an office in Dallas later in the summer to anchor the southwest build out.

On the east coast, Citi plans to staff up existing offices in Florida, Washington, DC, Philadelphia and New Jersey.

In Canada, talent will be added in Vancouver, Montreal and Toronto. No acquisitions are planned, Charrington said.

US Trust veteran Charles Merrill has been brought in to step up recruiting and business development efforts in New York.

Industry perception that New York accounts for a disproportionably high percentage of Citi Private Bank’s revenues and profits was “incorrect,” Charrington said.

But he readily acknowledged that New York, headquarters to both the Private Bank and its parent company, Citigroup, was vitally important to the bank’s ultra high net worth business.

“New York is the financial centre of the world, and it is a massive market in our business,” Charrington said. “We think we can grow quite substantially here.”

Only a part

Adding more talent and more offices are only part of Charrington’s push to grow the fortunes of Citi Private Bank.

The wealth management wunderkind, an Oxford-educated Englishman still in his 30s, believes that despite Citigroup’s well-publicized problems of 2008 and 2009, the bank’s global reach and balance sheet are trump cards that will win over ultra high net worth private banking customers with a net worth of $25 million or more.

The last few years have “clearly been a challenging time for the bank,” Charrington acknowledged. “There’s a lot of hard work still to do to ensure we regain trust and confidence from clients.”

But the difference between the bank now and 18 months ago, he maintained, is “like night and day. Now Citi is one of the best capitalized and strongest banks in the world. The company feels like it has a lot of energy and momentum. There is significantly increased morale and client business is picking up.”

Dislocation in the wealth management marketplace represents an opportunity, Charrington said, “as clients review how they receive financial advice.”

Citi Private Bank, he argued, is well positioned to compete against both large Wall Street rivals and independent boutiques.

Wirehouses who have recently been through mergers will have “significant integration issues for quite some time to come,” he said.

By contrast, Citi Private Bank no longer overlaps with Smith Barney and reports to Citi’s institutional clients group.

Boutiques

As for boutiques, Charrington said he had “great respect” for them and expects they “will continue to do well.”

Boutiques are especially well positioned to provide financial advice and to run money in “specific areas,” he said. But boutique firms also have an Achilles Heel, Charrington maintained.

“They are going to struggle to give you access to global markets and to balance sheets,” he said. “Scale does help clients.”

Lending and credit, Charrington said, “are very important businesses for us, especially in North America. A lot of clients are entrepreneurs and business owners and we assist them with liquidity needs and basic financing such as second or third mortgages, financing an aircraft or obtaining a line of credit against a portfolio.”

Private banking clients also want access to Citi’s global network to help them invest and do business, Charrington said.

“No one has a better emerging markets footprint,” he claimed. “Clients should have exposure to these markets and we’ve been doing business there for a long time and can give it to them.”

Charrington has a case, to a point, said Alois Pirker, research director for the Boston-based Aite Group.

“Citi and HSBC are very similar,” Pirker said. “They have a global retail presence that very few others have. If they play their cards right, they can leverage this exposure with clients and offer them a service that others can’t.”

But losing Smith Barney has brought Citi Private Bank some challenges, he added.

“The feeder system is missing,” Pirker said. “Citi has a strong existing business and will get referrals, but they can no longer leverage the brokerage pipeline internally as those clients become wealthier.”