Local presence backing up Citi’s ability to support all

July 18, 2022 | 08:00
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Through its relentless efforts in accelerating the growth of sustainable finance, multinational financial services corporation Citigroup has solidified its position. Peter Babej, CEO of Citi Asia-Pacific, discussed with VIR’s Luu Huong how the bank is advancing on its path towards sustainability with novel services for corporate clients, in this country and beyond.
Local presence backing up Citi’s ability to support all
Peter Babej, CEO of Citi Asia-Pacific

What are Citi’s priorities in Vietnam and where do you see growth opportunities?

We are very optimistic on our outlook for the country and are excited by the opportunities to support clients in Vietnam and across our network.

Vietnam is one of the most dynamic emerging economies in Asia, with GDP per capita having witnessed a significant leap. During the pandemic, the Vietnamese economy has proven to be resilient, with huge potential in terms of attracting global supply chains.

Citi has raised close to $6 billion from global capital markets to support the growth aspirations of Vietnam clients in the last five years. As the economy continues to evolve, we expect to see further capital markets opportunities for our clients. We also see increased investment opportunities in Vietnam for our clients and this presents growth opportunities for Citi’s institutional businesses across banking, services, and markets.

We already have leading positions across various areas including digital payments, corporate banking, treasury and trade, forex, and commercial banking. Many of these are complementary so we can also expand our wallet share further.

Our commercial banking business supports clients who are part of global supply chains in Vietnam. The business also supports emerging corporates in the fast-growing new economy and digital segments.

We are also witnessing increasing investments into Vietnam by our multinational clients, and our priority is to support these flows. In essence, we are serving our clients as the network bank that connects the world to Vietnam and Vietnam to the rest of the world.

Our network-driven strategy enables us to help our clients grow in any country where they do business. This includes multinationals who are expanding globally, particularly in Vietnam, and Vietnamese companies that are growing beyond their home market and expanding in the region.

What is your strategy in the region and in Vietnam to support the bank’s global ambitions?

Citi’s vision to be the preeminent banking partner for institutions with cross-border needs and a global leader in wealth management plays to our existing strengths in Asia.

We see Asia’s GDP flow through our network every quarter. We have helped raise over $200 billion for our Asian clients from global capital markets in the last 12 months and advised on over $100 billion of merger and acquisition involving Asian companies.

The region offers exciting growth opportunities – it is home to the fastest growing wealth segment globally and institutional clients that are being formed and going global in record time. This offers further opportunities across markets, banking, services, and wealth for Citi in the region.

Our leading global network gives us a unique ability to support wealth and institutional clients in an increasingly complex world. Citi was recently the sole lead arranger and lender on a $200 million 6-year, fixed-rate, dual-tranche secured amortising loan for Peruvian domiciled Viettel Peru S.A.C. – a subsidiary of Viettel. This transaction showcased the breadth of Citi’s capabilities.

How has Citi contributed to Vietnam’s sustainability journey and what are you doing to embed environmental, social, and, governance (ESG) measures to support clients here?

In the ESG space, Citi is a global leader in advising, financing, and catalysing more sustainable business models, working with clients around the world on their net zero transitions.

Our ESG agenda reflects the role and the responsibility we feel as a global bank to solve many of society’s toughest challenges. It is part of our business model and embedded in the products and services we offer.

We have been leading environmental initiatives in the finance sector for more than 20 years and have made recent sustainability commitments as a firm, including to reach net zero by 2030 for our own operations and by 2050 for our financing activities. We are also committed to $1 trillion of sustainable financing globally by 2030, $500 billion of which will be used for climate solutions.

In Vietnam, Citi will finance and facilitate a wide array of climate solutions, from renewable energy and clean technology to water conservation and sustainable transportation to help accelerate the country’s transition to a low-carbon economy.

Citi has executed the first Voluntary Carbon Credits (VCCs) transaction with a project developer in Vietnam. The project aims to reduce CO2 emissions via the distribution of efficient cookstoves and water purifiers to over 350,000 rural, very low-income households. The transaction involved Citi purchasing VCCs generated by the project from the developer. VCCs can play an important role in enabling companies to participate in greenhouse gas reduction activities.

Citi has also been financing the import of wind turbines and working with a multinational company in the commodity trading segment for green financing to purchase coffee that has been grown in an environmentally friendly way from Vietnamese agents and farmers.

We are keen to further work with the Vietnamese government on finding innovative solutions to green financing, such as blended finance models that can address bankability challenges in support of both the government’s National Green Growth Strategy and the objective of further encouraging foreign investment into the country.

We recently also signed an MoU for cooperation on the ESG agenda towards net-zero carbon emission targets with the Ministry of Natural Resources and Environment.

The official signing of the MoU was attended by Vietnamese Prime Minister Pham Minh Chinh and US Secretary of Commerce Gina Raimondo in May. The purpose of the MoU is to facilitate the exchange of information and to share knowledge and technical assistance to support low-emission developments to deliver the government’s net-zero emission objective by 2050.

We will continue to discuss how Citi can support the Vietnamese government in areas of foreign direct and indirect investment, digital transformation, and ESG.

How does disruptive tech play a part in Citi’s development in this unprecedented time, particularly for institutional clients in Vietnam?

Technology has been at the heart of the transformation across most industries in the past decade or so. To compete in the rapidly evolving and expanding fintech field, traditional financial institutions will need to be at the forefront of technological advancement.

Technology used to be data centres or the ability to process transactions. Now it is not just about increasing capacity, it is about what's next in the evolution of technology and financial services. We are already using AI and API across our banking services, for example.

We continue to build out a comprehensive, digitally-driven first model. This is a must-win battle for a global financial institution like us.

We also need to be relevant to be able to bank companies, including increasingly digital-first companies, that are born out of Vietnam. Citi has launched a bold transformation to position the bank to win in the digital world. The world is changing and Citi needs to be simpler and more agile to deliver, compete and win in the disruptive decades ahead.

In 2021, Citi introduced a new service for institutional clients in the region, including Vietnam, to speed up cross-border payments. The CitiDirect BE® Document Center digitalises supporting documents and streamlines relevant processes required to facilitate cross-border payments.

We are committed to driving more digital-firsts for our clients in Vietnam as we extend our leadership in the market.

By Luu Huong

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