Posted on: Friday, June 4, 2004
Citigroup targets Hawai'i's wealthy
By Deborah Adamson
Advertiser Staff Writer
Citigroup, the world's largest financial services firm, has set up shop in Honolulu to attract business from wealthy U.S. residents and vacationers.
The New York-based firm recently launched its Honolulu wealth management operations through subsidiary Citigroup Private Bank. It's counting on the global reach of Citigroup to attract "old money" in Hawai'i, wealthy Mainlanders retiring to the Islands, and others.
"It's been an underserved market," said Scott Hayes, a Private Bank vice president who will head local operations. "There are a lot of opportunities to bring our global array of services to the Islands."
Citigroup plans to target individuals with net worths of at least $10 million and $5 million in liquid assets, as well as trusts, foundations, estates and privately held companies. The company also will serve as a local liaison for global clients vacationing in the Islands.
In private banking the money of wealthy clients is managed and invested by the financial services firm. Typically, clients pursue more sophisticated strategies, such as investing in a private venture capital fund. Trust and estate planning services also will be offered, among others.
The Citigroup subsidiary has had an office on Kalakaua Avenue since 1987, but it served mainly Japanese and Korean nationals in Hawai'i. The office also is overseen by Citigroup's operations in Japan.
But the growing wealth in the Islands has prompted Citigroup to start its Hawai'i operations, which will be managed by the U.S. subsidiary for the first time instead of being relegated to an overseas unit.
"Look at Kaua'i, Maui and the Big Island. Look at all the development. There's a lot of money coming over," said Hayes, who noted the presence of dozens of private jets at Kona Airport on the Big Island.
The private banking business in Hawai'i, though small, is growing, said Don Horner, president and chief operating officer of First Hawaiian Bank, a unit of BancWest Corp. and owned by French financial conglomerate BNP Paribas.
"It's been a very important growth area for us," he said.
In the past 18 months, First Hawaiian Bank has increased its number of private bankers from 15 to more than 25 to serve well-heeled clients. That's in addition to the 20 support staff. The bank has private banking offices on O'ahu, Maui and the Big Island.
Bank of Hawaii's private client business has been growing steadily, said Liz Loui Tom, manager for private banking. She declined to be more specific. The bank employs 18 private bankers and 22 support staff and has private client offices on all counties.
"We are so confident in the people and resources of Bank of Hawaii that we are not even remotely worried about any competition," said Bruce Glor, personal trust manager in private client services.
First Hawaiian Bank is counting on its local roots to make it a tough competitor to overcome.
"We've seen competition come and go in this market," Horner said.
But Hayes believes Hawai'i is changing to become more open to out-of-state bankers.
"There's a real change in dynamic there where people are looking at the global perspective," said Hayes, a former Bank of Hawaii project manager.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
