By Cho Jin-seo
Staff Reporter

When it comes to consistency, no bank in South Korea can beat Citibank Korea. Without making risky acquisitions, the bank has made gains every year. Despite the global crisis, Citibank has remained one of the most profitable and financially-sound institutions here on the back of its preemptive risk management.

The Korean arm of the American bank has been profitable since its incorporation in 2004, even during the recent financial crisis. And it boasts of the most reliable loan structure among major banks.

For Citibank, the year 2010 will serve as a milestone as the lender aims to achieve two major tasks ― a successful transformation into a holding company and differentiating itself from its competitors through innovation.

Citibank Korea CEO Ha Yung-ku has a clear vision to transform itself into the top bank in Korea both in profitability and asset soundness.

"Citibank Korea has the strongest capital structure with BIS ratio 16.46 percent among Korean lenders and we have a very sound and well balanced business portfolio," Ha said in an email interview with The Korea Times.

"We seek to be the best in terms of global banking services and customer satisfaction. Differentiation strategy will lead us to profitable growth and customer satisfaction."

To achieve the goal, the bank has stepped up efforts to set itself apart from its competitors by placing a top priority in developing innovative products and services.

In addition to its International Cash Card (ICC) and remittance fee waiver for overseas students, it has recently launched a handful of innovative products such as the PremierMile Card, the Smart A Plus Account, Citi Step Up Deposit, and Wonderful Mountain Climbing Account.

"These products effectively show how Citibank is different and innovative. Such differentiation is welcomed by our clients. Furthermore, we are reinforcing a perceptual scale expansion for Citi brand by installing more ATMs at busy traffic areas," Ha said

Following the global financial crisis, the local banking industry is expected to see an uphill battle among local lenders, particularly in the areas of cross-border banking and the investment sector where Citi has excelled with its global network.

Amid this change, Citibank plans to secure a foothold in the Korean market by transforming its governance structure into a holding-company system.

It is seeking to stabilize the organization and create synergy among the child companies after the establishment of a holding company.

Either in late March or in early April, four Citibank subsidiaries in South Korea will be rearranged in a holding-company structure with Citigroup Korea as the control tower of four retail banking subsidiaries. Only the investment banking unit will remain under separate control. The plan is likely to be approved by financial regulators soon.

One of the key reasons why the lender has been able to better cope with the crisis was that it has been more concerned about the "quality of profit" rather than the quantity of it. This month, the financial regulator announced that Citibank Korea was the least exposed to the risk of bad loans among local lenders.

The proportion of non-performing loans ― credit that is not likely to be repaid by borrowers ― to all loans made by Citibank was 0.0091, which was the lowest among all national banks. The industry average was 0.0122.

Citibank has been active in South Korea for 43 years, especially in corporate banking and cross-border transactions. The subsidiary was created in 2004 when the Seoul branch bought Koram Bank and its nationwide divisions at $2.73 billion.

CEO Ha has been leading the bank ever since. He worked at Citi for 20 years before taking the post of CEO of Koram from 2001 to 2004. In a rare case for a manager of the acquired side, he was named as the head of Citibank Korea.

In 2010, Citibank plans to strengthen its retail banking business here to catch up with major Korean lenders, such as Kookmin and Shinhan. The introduction of innovative retail banking products is part of its strategy to enhance the retail banking sector.

Citibank is also seeking to solidify its leading position in the wholesale banking area. It is a leader in corporate and investment banking thanks to its mother bank's global network and expertise.

Citibank also played an important role in the local capital market. Last year, it successfully managed a number of big bond issues, including a $3 billion deal for the Korean government and a $332 million convertible bond issuance for SK Telecom.

kjk@koreatimes.co.kr