North West Oil Group, Inc. (NWOL)

[cmzio]

DJ UPDATE: Citigroup Looks To Emerging Markets For Growth



(This updates an item from 1700 GMT with detail on Russian IPOs.)



By Victoria Howley

Of DOW JONES NEWSWIRES



LONDON (Dow Jones)--Citigroup (C) is concentrating on building its presence in emerging markets in eastern Europe and the Middle East and is looking to bolster its investment banking arm in Russia in particular, executives said at an investor conference Tuesday.

The world´s largest bank sees opportunities in developed as well as emerging countries in Europe, the Middle East and Africa, or EMEA. But growth in emerging markets will outstrip what Citigroup can achieve in more mature economies, where gross domestic product is increasing more slowly.

"GDP growth has been faster in emerging markets. We have looked at that as a company and aim to leverage it to gain market share over time," Chief Financial Officer Sallie Krawcheck said at an investor presentation in London.

Stable Western European markets like the U.K. and Germany account for the bulk of Citigroup´s EMEA presence, but Russia has been singled out as a focal point for the bank´s investment banking ambitions.

Citigroup said its strategy to transfer capital markets expertise from developed countries in the region to emerging markets has already delivered results in Russia. The bank highlighted the Russian brokerage business it opened a year ago as an example.

"We thought we would be a factor in the market in two or three years, but, in less than 12 months, we have risen to be No.4 with a 6% market share," said Bill Mills, chief executive of Citigroup´s corporate and investment bank in EMEA. The business turned profitable in the first year, he said.

The example contrasts with parts of Western Europe, where Mills said Citigroup had its work cut out because the investment banking business was fragmented and the market was competitive.

"We are rebuilding the French franchise. We went back to the drawing board about 18 months ago and we have repopulated the investment bank. France was not performing as expected," Mills noted.

Mills said he expects the Russian equity markets to take off in the next few years, and Citigroup is positioning itself to capture a significant share of the business.

"We think there will be a tremendous amount of equity issuance coming out of Russia," he said. "We think there could be up to $30 billion in IPOs."

Citigroup is also bulking up its investment-banking business in the Middle East and North Africa and has just added a team of Dubai-based research analysts to cover the Middle East.

"We look at opportunities across the (Middle East) region. We were the first bank to go back into Algeria. Now when you talk to people in the Middle East, Algeria is the first place they want to talk about," Mills said.

Oil-driven expansion has made parts of the Middle East a driver of Citigroup´s wealth-management business. The United Arab Emirates, Kuwait and Saudi Arabia saw 29% growth in private wealth in 2004, Citigroup said.

Marianne Hay, who joined the firm nine months ago to head up global wealth management, said the current boom in the Middle East is very different from the previous oil-driven peak in the early 1970s.

"Today wealth is more broadly spread and the local market has developed. You have to open local offices in order to serve the region properly," she said.

Emerging markets are also an important factor in Citigroup´s consumer business. The bank plans to open between 170 and 190 retail bank and consumer finance branches this year.

Of that total, 30 to 40 branches are planned in Russia, 20 to 30 are earmarked for Turkey and a further 30 to 40 will open in Poland.

"We will have doubled the number of branches by the end of the year (in Russia), and we are moving beyond Moscow and St. Petersburg," said Mark Robinson, Citigroup country officer for Russia.

He said the bank would have a presence in six Russian cities by the end of the year, rising to 10 by the end of 2007.



Company Web site: http://www.citigroup.com



By Victoria Howley, Dow Jones Newswires; 44 20 7842 9261; [e-mail]



(END) Dow Jones Newswires

June 06, 2006 13:15 ET (17:15 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.