Bank for Financial Institutions: Citigroup

IFR Awards 2018
9 min read
Steve Slater, Gareth Gore

In a year marked by mammoth fintech fundraisings, M&A among US regional banks, bumper insurance deals and the never-ending struggle of European banks, one bank took a raft of advisory roles while continuing to provide much of the routine plumbing that financial firms need for their daily chores. For those reasons, Citigroup is IFR’s Bank of the Year for Financial Institutions.

The most significant deal in financial services last year was a private placement. Chinese online payment platform Ant Financial raised US$14bn in June from domestic and international investors, in what amounted to the world’s biggest single equity fundraising by a private company.

It was a sign of how the financial landscape is changing: banks, insurers, payment providers and all financial firms must rapidly evolve or risk getting left behind. That’s left FIG teams across the industry trying to juggle the needs of new economy companies and their older, more staid clients.

Citigroup, which itself underwent one of the biggest ever upheavals of any bank a decade ago, was one of Ant’s advisers and is successfully tapping the fintech potential while continuing to provide the plumbing behind much of the financial system.

It was involved in many of the year’s landmark deals, spanning all product types, sectors and regions. It was financial adviser to Fifth Third Bank for its US$4.7bn purchase of MB Financial, the biggest acquisition by a US bank since the financial crisis.

It also advised on the US$4bn IPO of AXA Equitable, Blackstone’s US$17bn purchase of a majority stake in Refinitiv, The Hartford’s US$2.1bn purchase of Navigators, and the UK government’s sale of another £2.5bn of shares in Royal Bank of Scotland.


Ant Financial’s fundraising in June cemented its place as the world’s biggest fintech outfit. The deal valued it at about US$150bn – seven times bigger than Deutsche Bank for a firm that was only spun off in 2014 from Alibaba. There’s talk an IPO could come as early as 2019 – so there’s no shortage of interested advisers.

Citigroup was one of four international banks advising on the deal, alongside two Chinese firms. The US bank has long been close to Ant – it was sole adviser on its attempt to buy Moneygram, which in January was blocked by US regulators on national security grounds, and worked on Telenor’s partnership with Ant in March.

The Series C fundraising pulled in old and new investors. The renminbi proceeds mostly came from existing investors, while the US dollar tranche made up more than US$10bn and came from big investors such as GIC, Carlyle and Warburg Pincus.

“That was really a landmark transaction and a reflection of the very broad and productive relationship that we have with Alibaba and with Ant,” said Peter Babej, Citigroup’s global head of financial institutions.

It was also just one of several Chinese fintech deals Citigroup was involved in. The US bank started ramping up its technology focus in China and the rest of Asia about six years ago and is now reaping the rewards.

It advised on the US$1.1bn IPO of Ping An Healthcare and Technology in April and was on the November 2017 US$867m IPO of Chinese online car retailer Yixin, just after the US$1bn IPO of online microlender Qudian.


There was a fintech undertone to another of 2018’s most significant financial industry deals – US exchange operator CME’s US$5.5bn purchase of NEX Group in March.

The deal created a cross-border powerhouse for investors trading in FX and government debt, and allowed investors to access cash and futures trading and over-the-counter services via one provider for the first time. It improved access to markets and should cut trading costs. But the deal had to get through stiff anti-competition concerns. Citigroup advised NEX on the friendly deal.

“This is a visionary, industry-changing transaction,” said Piers Davison, Citigroup’s co-head of FIG in EMEA. “It’s bringing together a leading futures exchange with a leading cash market. It’s all to do with improving client access to trading and creating greater efficiencies, which is where the world is going.”

Davison said Citigroup’s role advising NEX stemmed from a long-standing relationship with the firm, and it has also worked closely with CME in the past. Citigroup has provided transaction banking products, lending and corporate broking advice, and while it’s been providing them, it’s also been discussing strategy and where the world is going.

“It’s a really good example of where we bring the full suite of our capabilities to bear to help build and work with them, and where they turn to us for a groundbreaking transaction,” Davison said.


Citigroup has FIG bankers in more than 30 countries and reckons its network, geographic reach and full suite of products give it an edge in a crowded landscape.

After all, there’s a lot of routine financial stuff that needs to be done: payments systems, treasury functions, custody services, trade finance, lending, securitisation, cash management, FX, derivatives and structured products, before firms even want to talk about M&A or debt and equity capital markets.

Citigroup is one of the biggest players in all those areas. It processes US$3trn in payments every day in more than 140 currencies through its digital platform. The bank said that remains the core of its FIG practice, and is mutually beneficial as a way to stay close to clients, and help them plan strategy.

“We think the plumbing piece is strategic in itself, as that’s how they grow their business and how we grow our business,” said Davison.

It’s nice landing the big deals, but it’s the everyday stuff that imbeds the bank with clients.

Big deals “are the cherry on top of the icing on the cake, but for our roughly US$3bn business that’s only 10%–15% of it”, Davison said.


Citigroup’s mix of leading platforms, network and strategic advice has been apparent in the past year in its success in cross-border deals and across debt and equity capital markets.

“Where we really shine is where the client needs something that is from the entire franchise,” said Babej.

DCM is a particular strong suit and Citigroup’s raft of joint bookrunner mandates included Additional Tier 1 contingent convertible issues by Lloyds Banking Group and BBVA, senior notes issued by Bank of China and Nationwide, and temporary writedown notes issued by Societe Generale.

The debt and financial structuring work often involved assessing what was needed from a regulatory perspective, and then putting the distribution platform to work.

“Once you’ve figured out what the answer or combination of answers is, then strategically for us we’ve then got the platform globally,” said Simon McGeary, managing director of capital strategy and structuring. “So if the answer is dollars or Tier 1 or euros or MREL or whatever, we can do it … it’s quite a simple step to implementation.”

That’s included smaller, bespoke deals too, such as a €220m sale of AT1s for the first time by Bank of Cyprus. The bank needed to offer the securities at the same time it was selling a portfolio of non-performing loans, which required investors to be wall-crossed early. In effect, it was almost a private placement process wrapped into a public transaction.

In ECM, Citigroup was senior joint bookrunner on the €1.4bn IPO of asset manager DWS after its spin-off from Deutsche Bank in March, and was joint global coordinator on the IPO of Iceland’s Arion Bank and the US$1bn rights issue by Turkey’s YapiKredi. It was active bookrunner on the complex US$4bn AXA Equitable IPO and mandatory exchangeable convertible in April, the biggest insurance sector new listing for 16 years, and was on the firm’s US$1.2bn follow-on sale in November.


Citigroup looks set to keep its foot on the gas targeting new-economy clients. Indeed, its top technology banker in Asia, Jan Metzger, was promoted in June to run its corporate and investment bank in the region.

The US bank said it pulls in financial and technology bankers for its fintech offer and also leverages Citi Ventures, its venture capital unit that invests in start-ups, and its tech innovation labs.

Other firms disrupting financial services that Citigroup has worked on with big deals in the past year include exchange ICE, Worldline and Klarna, plus Dutch payments firm Adyen on its successful €950m IPO in March.

“It’s proven that with fintech the totality of our offering is very strong and we get to be a strategic partner to our clients in a deeper sense,” said Per-Henrik Lewander, co-head of FIG corporate banking for EMEA.

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Bank for Financial Institutions: Citigroup