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Is this the shape of the future?

Citi's European bankers now less profitable than colleagues in Asia

When Citi divided up its bonus pool for 2020, its European traders and bankers may have found themselves further back in the queue than usual: for the first time in a decade, and probably for the first time ever, Citi's European investment bank was less profitable than its investment bank in Asia last year. 

Profits (income) at Citi's European institutional clients group (ICG), the unit housing its investment bank, were $3.3bn in 2020. By comparison, profits at Citi's Asian institutional clients group were $3.7bn. 

2020 was the only year since 2010 that Citi's Asian ICG business earned higher profits than the ICG in Europe. Citi's Asian investment banking business was even nearly as profitable as its U.S. business last year; margins in Asia were nearly twice as high. 

Citi doesn't split out how many people it employs in Asia, but the implication is that bankers in Hong Kong and Singapore should be deserving of bonuses of 2020. By comparison, bankers in New York and London might expect to receive smaller shares. - North American profits have plateaued. The danger in Europe is that profitability has been eroded by the additional costs of Brexit and 2020's performance is the shape of things to come.

Photo by Jason Cooper on Unsplash

AUTHORSarah Butcher Global Editor

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