Citigroup Lowers Threshold to Chase Russian Mass Affluent Market

Jason Corcoran

20 December 2006

Citgroup has cut the minimum threshold for its Russian Citigold wealth management service to just $50,000. Natalia Myshko, public relations manager for Citigroup in Moscow, told WealthBriefing the threshold had been lowered significantly in a move to broaden Russia's embryonic wealth management market. The standard investment range for such services in Russia is typically $500,000 to $1 billion. She said: "There is a growing affluence in Russia as customers' income levels are rising in line with economic growth. Unfortunately, these opportunities until now have been available only for people with very high levels of wealth." The Citigold World of Opportunities product offers advisory tools and access to investment products for investors with $50,000 and over. A dedicated Citigold relationship manager also works with clients to understand their profile based on past investment experience, risk appetite and expected returns and to construct a portfolio that meets their profile. Andrey Koryakin, head of Citibank office in St Petersburg, said World of Opportunities was targeting 236,000 families with income of more than $100,000 annually, which accounts for a potential investment market of $292 million. Joel Kornreich, country business manager for Citigroup's consumer bank, said: "Russian customers are offered to invest not only in the local market, but in the Western market as well. Our professionals' advice is based not only on prices at real estate market or current oil prices. We offer long-term and reliable investment programs three to five years". Kumar Ramachadran, director of retail banking, said Citibank had grown by 70 per cent this year with credit cards and investments adding much to the growth. The volume of investments in mutual funds accounted for more than $500 million this year. He said: "With our new branches and innovative products, we look forward to bringing world-class wealth management services to more Russian professionals and entrepreneurs." Charles Prince, chief executive of Citigroup, visited Moscow in January this year for the first time for the opening of the group's 25th branch in Russia. He emphasised Citigroup's role in the expansion of Russia's consumer, corporate and wealth management sectors.