REUTERS SUMMIT-Asia's wealth spurs competition for private bankers -Citi

(For other news from the Reuters Global Wealth Management Summit (LSE: SUMM.L - news) , click on http://www.reuters.com/summit/Wealth14)

By David Henry

New York (Frankfurt: HX6.F - news) , June 18 (Reuters) - Asia is the most competitive region in the world for bankers catering to the very rich, but also presents great opportunities for private bankers, the head of Citigroup Inc (NYSE: C - news) 's private bank said.

"We are very focused on covering places like China, India and Hong Kong because of the industry growth over the next five years that is going to generate new wealth," Mark Mason of Citigroup said on Tuesday in New York at the Reuters Global Wealth Management Summit.

Citigroup was the second largest private bank in Asia last year after UBS AG (Xetra: UB0BL6 - news) , according to Asian Private Banker.

"Asia is particularly competitive for bankers," who face pricing pressure there, Mason (Shenzhen: 002654.SZ - news) said, but it is especially promising for those who can offer full-spectrum wealth management services, including loans, to clients.

Figures from Boston Consulting Group earlier this month showed that private wealth in Asia-Pacific, excluding Japan, rose by 30.5 percent in 2013 compared to a year earlier to hit $37 trillion.

That trend is expected to continue as hundreds more companies from the region go public in the next five years. Alibaba Group Holding Ltd, the Chinese e-commerce giant, is expected to create a long list of multi-millionaires just from its partners in the company when it goes public later this year, in what could be the biggest technology-sector initial public offering in history.

UBS has also been trying to bolster its ranks in the region, increasing its wealth management staff by 8 percent this year to 1,120.

Though Citigroup as a whole is pressing to reduce costs, Mason said the company is backing new hiring and investments in technology in the private bank to win more of the business growth in Asia.

"We are investing in bankers in Asia and covering China in particular," said Mason.

He declined to say how much more money Citigroup is spending on bankers, new products and a new information system for clients and bankers to use to track accounts.

Clients, who must have $25 million in assets under management to qualify for a Citi private bank account, increasingly want to borrow money against their investments, Mason said.

"We have had good lending growth," he said. "They are borrowing against their securities. They are using that money to reinvest in other portfolios with us."

Citigroup's private bank reported $2.5 billion in revenue in 2013, about 3 percent of the total for the New York-based company, which is the third-largest U.S. bank by assets and does about half of its business outside of the United States.

Returns are high for the amount of capital the business requires, Mason said, which is another reason for the intense competition from other global institutions, as well as regional players.

Every week, Mason said, seems to bring another report of a competitor adding staff or allocating more capital to lend to the wealthy.

(Reporting by David Henry in New York Additional reporting by Rachel Armstrong in Singapore; Editing by Linda Stern and Leslie Adler)