Homecoming at Citigroup

By PAM GRAHAM

Citigroup's new manager for New Zealand, Gary Newman, is still getting his feet under the desk but he already thinks ANZ's purchase of National Bank offers a business opportunity.

Newman has an advantage over other country managers of global organisations because he grew up here and is a former chief dealer of domestic interest rate markets for ANZ.

He spent the past few years in Australia with Citigroup where he had responsibility for services to financial and public sector institutions.

"I wanted to come back and run Citigroup in New Zealand. That really appealed as a New Zealander," said Newman, from Dunedin.

Overall, the company employs about 60 people in New Zealand, offering corporate lending, treasury, cross-border cash management, structured finance, equities trading and custodian services. It does not have retail branches.

Newman said he wanted to expand Citigroup's business while recognising that the banking sector here was competitive and sophisticated.

His arrival coincides with Lloyds TSB's sale of National Bank of NZ to ANZ, creating an opening for rivals.

Newman said that if ANZ, for example, had $1 of exposure to a "name," or New Zealand customer, and National Bank had $1, the combined group was unlikely to want $2 worth of exposure. This applied to foreign exchange and derivatives trading as well as straight lending.

The situation works both ways.

"Lenders, or banks on occasion, tend to forget that while we assess the credit-worthiness of our customer base they are doing it to us as well."

He questioned whether customers wanted an entirely Australian panel of service providers.

Newman said the other area of opportunity was in providing services to competitors.

"The position we took in Australia, and one I hope I can take here, is that as long as we understand defined areas where we compete with other banks, there are areas where we can be each other's customer.

"The two-thirds where we can have a relationship far outweighs the third where we compete."

He said the idea worked the best for international cash management and foreign exchange services.

Newman replaces Andrew Au, who moved to Hong Kong with the company.