Citigroup set a goal this year of regaining the top spot in in Euromoney’s annual rankings of the world’s largest foreign exchange trading operations by volume, which it last held in 2002.
But it fell just short-coming in 0.28 percent behind leader Deutsche Bank in market share.
Citi put its push to regain the top spot in the hands of Bernie Sinniah, its global head of FX corporate sales, who was transformed into a “Bernieman” superhero character in a marketing push designed to lift Citi’s standing. Even while getting edged out, Sinniah noted that there is a lot of good news in what the survey showed for Citi.
Traders recently spoke with Sinniah from Citigroup’s offices in London to ask him about the vitality of the foreign exchange market, what clients are looking for-and whether he thinks Citigroup will be able to leap to the top of the FX heap in a single bound in the coming year.
Q.: So, Bernie, the results of the Euromoney poll are now out. You campaigned pretty aggressively for this survey. How do you respond to the results?
A: We came in second, for the second year running, and though clearly we wanted to win, we are very happy with our performance. We lost to Deutsche by only 0.28 percent, which is the second-smallest margin of victory since 1976. And our market share increased by 1.64 percent from last year. This was the biggest jump in volume enjoyed by any bank in the top 10.
Q.: Are there any other areas of the survey results that you see as important, especially for Citi?
A: It is very noteworthy that the market is separating into three distinct tiers. There are the top two-us and Deutsche-and then a gap of 4.64 percent between us and the next tier of three banks, and then there is another large gap between these three banks and everybody else.
It is also interesting that in the past four years, Citi has more than doubled its share of the FX market (from 7.32 percent to 14.9 percent), while Deutsche has lost more than 25 percent of its market share in the same period (20.96 percent to 15.18 percent). I think they know we are after them!
Q.: Citi has led the corporate segment of the FX market for years. How do you convey to corporate clients that Citigroup is the best bank to handle their FX business?
A: We have very long-standing relationships with our clients, characterized by consistent and high-quality interactions. A lot of these are global customers, and we help them with every aspect of their business, from opening an account in a new country to mergers and acquisitions. We are also represented in every product line, and we look after our global clients, 24 hours per day. Citigroup has a sales force in almost all the countries around the world. We are everywhere and have other products that complement the core products being shown by the bank.
Q.: But how does Citi differentiate itself with corporate FX clients when all the big banks can offer similar service?
A: Well, in fact not many banks can offer the same kind of diversity of products all over the world that we can. But on top of that, behind each sales person is a set of resources we can use to create solutions for the client’s needs, whether they’re in e-solutions, structuring, risk management team, or economic research and analysis. Citi is represented all over the world, so we have the local market expertise and execution capabilities. Citi has been in foreign exchange since 1902. It is one of the fundamental products for the whole Citi franchise.
Q.: In regards to Citi’s corporate FX clients, are they doing anything different or at different levels than they have been?
A: On the corporate FX side, there are three activities we perform for corporate clients. We do their global payment-related activities and their global trading, and also all their electronic execution.
Clients are more reluctant to do as much long-term hedging as was once the case, as, for various reasons, long-term business forecasts are subject to many more variables these days.
Q.: The FX market as a whole seems to be rebounding well after years of slow growth. How is Citigroup capturing some of this heightened activity, especially in such a concentrated market?
A: We are very comfortable with the way we are progressing in the market. We might compete with this bank or that bank in the some of the developed markets, but we compete with completely different banks in the Canadian market, for example. And we will compete with completely different ones in Japan and in Singapore. We don’t take anyone for granted.
But having said that, I think a consolidation is happening and more volume will be concentrated within the top three or four banks. Once again, the Euromoney poll underlines this trend. This is partly because banks now have to provide extensive post-trade services and not everyone can do this.
