Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2013

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

During this prolonged period of stress in the banking industry, financial institutions are returning to their roots to rediscover reliable sources of revenue growth and to reestablish their relevance to their most important customers. In this setting, Investment businesses — particularly OTC derivative , Foreign Exchange products and securities trading — stand out because of their attractive growth rates, the size of their market, and their scalability.

The combination of material economic growth in a growing number of countries and the trade flows between them for goods, for foreign direct investment and in securities markets suggests that the underpinnings of these businesses will be strong for the foreseeable future — a fact that has not gone unnoticed by a variety of highly regulated banks and unregulated third parties.

Besides the factors that make these businesses attractive today, the underlying drivers of volume should continue to put them in the sweet spot for well-positioned participants. Whether as intermediaries in flows of underlying economic activity within and between countries, facilitators of foreign direct investment, or beneficiaries of rising volumes, value and volatility in capital markets, banks will remain major actors in connecting buyers and sellers. In this connection, such asset-servicing businesses will continue to benefit from long-term secular trends driven by aging populations, rising pools of savings and globalization of investment flows.

Over the past few decades, OTC Derivatives, FX & Securities Trading Products have proved to be extremely flexible risk management tools, allowing end users to manage a wide of interest rate and currency risk as well as lower financing costs. Therefore in order revenue range to add further value to the existing Liabilities proposition and to diversify the stream, Citibank can take advantage of its global footprint by tapping in the growing OTC Derivatives, FX & Securities Industry.

The Launch of such lucrative investments products will not only provide a product extension to the existing liability customers Investment products but will also ensure potential opportunities of generating an immediate source of revenue for the Bank (by retaining current relationship, deepening and bringing NTB customers etc). Furthermore, such initiative will also addressed attrition in the existing portfolio and provided customers with a new avenue for investment. Entering the market in this capacity will also help Citibank to compete with other foreign banks offering and will certainly set the stage for introduction of other investment products at a later stage.

Pages

55

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