NUR-SULTAN – David Livingstone, Chief Executive Officer in Europe, Middle East and Africa (EMEA) at Citi, in an exclusive interview with The Astana Times, spoke about the bank’s activities in the region and how the pandemic is affecting the economies around the world.
Citi is one of the largest foreign investors in Kazakhstan and is a key partner for international investors, the public sector, and businesses in the country. Its subsidiary bank, Citibank Kazakhstan, has been the largest bank in the country by volume of processed payments through correspondent accounts for the past years (significant payment service provider since 2017) with a 25 percent market share in that segment. In 2021, Citi Kazakhstan was named as the Overall Market Leader and Best Service by the Euromoney Trade Finance Survey.
What are the main priorities of Citi’s activities for the EMEA region in the short and medium term?
EMEA’s priorities naturally align with our global priorities. We are focused on excellence in everything we do, from our client service to our operational efficiency and our control environment. We are investing in areas where we see the most robust opportunities, while modernizing our infrastructure and driving higher returns for our shareholders. One example is in wealth management.
One example is in wealth management. In mid-April, we announced actions in our Global Consumer Bank to enable more targeted investment in businesses and geographies where we have the competitive advantages and scale necessary to drive higher returns. As a result, Citi’s Global Consumer Bank will have a focused presence in Singapore, Hong Kong, London, and the UAE and will divest its consumer operations in 13 markets in Asia and EMEA.
Citi will continue to operate in every market it does today through the Institutional Clients Group – including these 13 markets – so our global network, our key competitive advantage, is not changing.
Excellence in client service is about being simpler, having great connections internally to anticipate the needs of our clients and assisting our clients in their shift to digital by deploying best-in-class technology. Kazakhstan, for example, is amongst the leading countries within Citi EMEA in the usage (measured by log-ins) of biometric access and using the CitiDirect mobile app, which has been ranked number one again globally for the 15th year running in Greenwich Associates’ 2020 Digital Banking Benchmarking study. This comes along with the seamless service to our clients.
Our people have remained a top priority throughout the pandemic. I am extremely proud of our collective response to the conditions, including in Kazakhstan. Despite the rapid move to extended remote working, Citi Kazakhstan has maintained excellence in service over the past 1,5 years.
Citi Kazakhstan has made a special one-off payment to a quarter of our employees, those most likely to feel economic hardship from COVID-19 related challenges.
We are also really proud of our partnership with the National Paralympic Committee (NPC) of Kazakhstan, which has just been renewed. Citi began supporting the Kazakhstan NPC in 2020 and total funding will exceed $60,000 by 2022. We are keen to lend our support to developing Paralympic sports in Kazakhstan, changing perceptions of people with disabilities and training Paralympians for the forthcoming Paralympic Games in Tokyo and Beijing.
In October of 2020, the WWF, with support of the Citi Foundation, launched an international online quest “Another Planet” in Kazakhstan, which provides college students information about environmental professions and the foundations of ecological thinking.
In February 2021, the Citi Foundation and WWF launched an educational course for locals on ecological tourism in Kazakhstan.
What are the priority areas for Citi’s engagement in Kazakhstan?
Citi has been present in Kazakhstan for almost 30 years, and we are continuing to invest. We believe that Kazakhstan has enormous growth potential, including the opportunity to develop new industries. Our subsidiary, Citibank Kazakhstan, processes a large portion of the country’s trade flows and a quarter of all the corporate payments. We see our success in Kazakhstan as a great example of how Citi is managing to fulfil its mission of enabling growth and economic progress,while supporting our clients’ diverse interests.
Kazakhstan has a great deal in its favour, including its location at an international trade crossroads, the commitment of the authorities, developed transportation and financial infrastructure, skilled human capital, and enthusiasm from international investors. As a major global trade bank, alongside our expertise in investment banking, we have long seen burgeoning trade flows in and out of Kazakhstan. We are now also seeing an increased interest from companies keen to invest in manufacturing, retail, agriculture, and other industries.
How would you evaluate the investment opportunities in Kazakhstan?
Kazakhstan continues to exhibit great potential. In the last 30 years, the country has tripled its GDP and attracted $350 billion worth of foreign direct investment. We are encouraged by the extent of the financial infrastructure and favourable taxation policies.
Growing capital markets will be important to further economic development and is an activity in which we are very pleased to play an active role. In 2020, Citi led all international equity offerings from Kazakhstan. That included a successful SPO of the Samruk Kazyna Sovereign Wealth Fund’s shares in Kazatomprom, the world’s largest uranium producer, and the IPO of Kaspi.kz Group, the e-commerce and fin-tech group.
We are positive about the future of the country, and the prospects for our business.
What is your opinion on how the pandemic has changed the economic landscape globally?
One of the most significant financial effects of the pandemic has been the introduction or continuation of extremely low, or negative, interest rates in many parts of the world. I believe the fiscal and economic policy response to COVID-19 needs reassessing, or we run the risk of creating imbalances in the global economy.
Aggregate supply has fallen as governments purposely shut certain sectors of their economies in response to the pandemic. Demand also fell, largely in line with reduced supply. Certain economies remained in balance, albeit at lower levels of activity.
There is a valid debate to stimulus and monetary easing are long-term additive or supportive of demand. We are already seeing inflation emerging at higher levels, and this needs to be watched.
However, we seem fixated on attempting to stimulate aggregate demand.