Despite the private banking sector damping prospects on growth in an environment of high deposit interest rates and banks struggling with liquidity issues, Citi's private banking arm in Hungary recorded an increase in its customer base and assets under management during 2011.
Citigold has played a pioneering role in Hungary in the capital-protected and foreign funds markets, with product development and innovation being a key element of the bank's offering throughout the years. "While most Hungarian providers offer structured funds we put more emphasis on structured bonds," said Péter Somogyi, Citigold's account management and managing director of investment business in a recent interview with local online financial journal www.Portfolio.hu
According to Somogyi, Citigold's success is due to its segmentation efforts in the Hungarian private banking sector. The US bank temporarily suspended its entry level with customers later agreeing to top up their accounts to the current entry limit of HUF15m (€51.145). Like other private banking firms such as Friedrich Wilhelm Raiffeisen, Citigold puts more emphasis on premium clients who are categorised between retail and private banking clients with a lower entry level.
Citibank offers two to three structured bonds every month. Its latest, Athena One Touch Certificates, is a four-year 60% soft-protected growth bond linked to the performance of the Eurostoxx50 and backed by BNP Paribas Arbitrage Issuance B.V. This knockout/protected tracker structure, denominated in euros, will mature early returning capital plus 8% for each year elapsed if the index value is at or above its initial level. The maximum potential payout at maturity is 132% of initial capital.
This product is available in the Hungarian database.