Morning Coffee: Citi’s new growth plan is based on this female banker in London. The compliance officer caught in a Chinese spying scandal

As we know, Citigroup’s Jane Fraser has set some aggressive revenue targets for the business lines she regards as having potential, and isn’t scared of going outside the bank to find top talent in order to achieve them.  No, we’re not talking about Vis Raghavan this time.  As well as aiming to increase the productivity of its investment banking businesses, Citi wants to double the revenue it generates from smaller and midsize corporate clients.  And key to that strategy is Tasnim Ghiawadwala the Global Head of Commercial Banking, who was hired back from Barclays in October 2021, six months after Fraser become CEO.

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Ghiawadwala spent two decades at Citi from 1997, where she was eventually head of the EMEA corporate bank. She then left to become Barclays’ head of UK Corporate Banking for three years. Both roles were good preparation for her current task.  The British market is extremely competitive, and banks there know that they need to hustle their clients for every bit of cross-selling business they can bring in, at every scale.

That’s apparently something of a difference from the previously prevailing culture at Citi, which has historically concentrated on making huge loans to equally huge corporations, dominating the global payments services market and then sitting back and waiting for the profits to roll in.  One client told the Financial Times that although they had found Citi’s global reach and payments network invaluable, they were “talking to a lot of banks” when it came to a possible IPO, and had found one of their competitors easier to work with on their employee payroll. 

Ghiawadwala needs to stop the commercial banking division from fumbling that kind of opportunity.  Technological progress is arguably on Citi’s side. It’s now a lot easier to extend and leverage the infrastructure, and you don’t need to hire quite so many relationship managers in a world in which most medium-sized corporations would rather open up an app than put on a suit and walk into a branch.  Six new “regional leaders” have been named since the beginning of Project Bora Bora, covering markets like Japan, Canada, France and Switzerland.

The trouble is that it isn’t necessarily just a matter of superior hustle.  Small and medium-sized clients can be profitable, but they can also be risky.  They have a nasty habit of changing form – when buying an interest-rate swaps product or a foreign exchange option, they act like sophisticated financiers, but as soon as the market turns against them, they turn into poor little innocents and start claiming to have been mis-sold.  Citi has bought a stake in an AI startup which aims to improve risk analysis for business customers, but the danger might be that this is one of those “safe” business lines that banks try to emphasise above “risky” investment banking and trading, but then turns into an iceberg.

Elsewhere, one of the things that being a compliance officer has in common with being a spy is that the job is made up of long periods of unbearable tedium, interspersed with very rare moments of absolute terror.  Most of your time is spent on routine checks of things that are exactly as humdrum as they seem.  And occasionally, something shows up which suggests that someone at your place of work might be doing something very wrong.

Bharat Bhagani, a compliance officer at the London office of a Hong Kong-registered forex brokerage, had an unusually vivid version of this particular career nightmare – he grew to suspect that he’d been asked to get a UK visa for someone who actually was a spy. 

The Chinese Embassy claims that these suspicions were incorrect, but it seems that they were legitimate enough for the British authorities to interview him.  And it appears that his employer, Goldenway Global Investments, which is no longer authorised to do business in the UK, didn’t give any serious reasons why they thought an appropriate response to Mr Bhagani raising these concerns was to sack him.

Being a whistleblower is one of very few grounds for unfair dismissal where Employment Tribunal compensation awards aren’t capped, so Bhagani was given £564k ($745k) in compensation. And presumably he now has an absolutely great response to anyone who ever suggests to him that being a compliance officer is boring.

Meanwhile …

More details are coming out about the Two Sigma drama.  Apparently, Siegel and Overdeck were not really planning to step down as co-CEOs, for the incredibly on-brand reason that neither of the feuding pair could bear the thought of leaving the other one as sole chief executive. (WSJ)

SocGen is apparently “in talks” to hire Enrico Chiapparolli, who recently left Barclays shortly after being promoted to co-head of EMEA industrials.  If he goes there, he will be based out of Milan, but it’s not clear if he will be able to benefit from the extremely favourable expat tax system there.  (Bloomberg)

Once upon a time, Darren Swayne worked for Oxburgh Partners, so even though he’s been concentrating on his events business for more than a decade, he’s still a “hedge fund manager” in news stories about the adjudication of resident complaints about the “Ibiza-style” parties he apparently hosts for his customers in a stately home in Norfolk. (Daily Express)

Is a wealth tax the same thing as a “nuclear bomb”? Of course not.  But if you’re the CEO of a Swiss private bank talking about a proposal from the youth wing of one political party, you might be forgiven a bit of excessively dramatic language. (Reuters)

Edmund Koh is making it clear that he is leaving Iqbal Khan a good legacy at UBS in Asia.  In his last town hall before moving from President to Chairman of the bank’s Asian business, he has said that all 13 of the bank’s markets had growing revenue in the second quarter. (Bloomberg)

The CEO of fintech Klarna is sticking to his claim that (having already laid off 2,000 employees in the last year), he can use AI to replace half of his remaining staff. (Business Insider)

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