“If I’m not in that position in 2012, I won’t be here,” Roberts, the country officer for Australia and head of markets and banking, said in an interview. “That I guarantee.”
It may be a big ask: Roberts’s takeover advisers rank 11th this year and haven’t placed in the top three since 2002, and his share sale arrangers haven’t been there this decade, according to data compiled by Bloomberg. The former Salomon Brothers banker is also up against Bank of America Corp. and Nomura Holdings Inc., which have made public pledges to climb the league tables.
“Foreign banks like Citi have had a tough time breaking into the Australian market,” said Frank Zumbo, associate professor and competition expert at the Australian School of Business, part of the University of New South Wales. “They’ve got a long way to go in a very tough market.”
Roberts, 53, the most senior Citigroup banker in Australia since 2003 and its top executive in the nation since April 2008, said he’s relying on some of the new hires in the past six months to turn things around.
The New York-based bank this month hired Tony Osmond from Goldman Sachs JBWere Pty in Melbourne, where he led mergers and acquisitions, natural resources and industrials, to become head of investment banking in Australia.
In April, Citigroup named 20-year UBS AG veteran Brett Paton as vice chairman of the institutional clients group, which includes the advisory and markets businesses. His appointment followed that of ex-UBS banker Karen Phin as head of capital management advisory.
“Today, I have what I need,” Roberts said in the July 20 interview at Citigroup’s Sydney offices. “I don’t have any desire to build any other franchises.”
Citigroup is reconstructing its Australian business after axing a quarter of the local workforce, down to about 1,900, since the global financial crisis, according to the company.
Roberts, who started his career in New York in 1984, said the firm’s business had been marred by inefficient risk management and inadequate cost controls.
“We were not an efficient place of business in 2007 and 2008,” Roberts said. “There is no question that there has been some brand damage over the last two or three years. Whatever the league table position has been, it hasn’t been commensurate with my expectation. That has to change.”
Citigroup’s ranking outside the top 10 this year among Australian merger advisers, who are led by JPMorgan Chase & Co., partly reflects that the bank sided with companies that lost deals, or worked on transactions that weren’t completed, Roberts said.
The bank said it was among advisers and financers on this month’s failed bid by KKR & Co. for Australian hospital owner Healthscope Ltd. The winning $1.7 billion offer came from Carlyle Group and TPG Capital, Healthscope said this week.
Citigroup’s investment bank in Australia will focus on real estate, financial institutions, metals and mining, energy and industrial companies, according to Roberts. Still, it’s tough to get planned deals done.
“I’ve just gone through the list and it’s longer than I can ever recall,” he said. “It won’t all get done, there’s no question. It’s one of the most difficult operating environments I can recall. This pipeline that everyone talks about will be just that for a long time.”
Citigroup is among foreigners in an Australian market that some bankers say dispenses the biggest fees in Asia outside Japan. Nomura said in May it plans to almost double its Australian workforce to win a top-five ranking. Bank of America said in March it would hire staff to return to a top-three position among investment banks in Australia.
“When you’ve got players clamoring to get into a market, that is usually a sign there are healthy margins,” said Zumbo, the associate professor at the Australian School of Business.
In the debt market, Roberts said he sees “significant” work refinancing debt and raising capital for Australia’s four biggest commercial banks, which include Westpac Banking Corp. and Commonwealth Bank of Australia. Moody’s Investors Service has said those banks issue as much as A$50 billion ($44 billion) of long-term bonds each year.
Citigroup is Australia’s sixth-placed arranger this year of G3 currency bonds, which are denominated in U.S. dollars, yen and euros, after topping that table in 2009, according to Bloomberg data. Among arrangers of bonds sold in the Australia market, the bank ranks 12th in 2010, unchanged from last year.
“If you don’t have the banks as a front-and-centre role in your debt markets activity, you’re going to be missing out on a significant volume of business,” Roberts said.
To contact the reporter on this story: Angus Whitley in Sydney at firstname.lastname@example.org