Coming up to the half-year mark of his tenure as CEO of Citigroup’s EMEA operations, David Livingstone talks to Kat Van Hoof about prioritising client satisfaction, keeping up with digitisation and anticipating future opportunities created by big structural shifts in the global financial system.

David Livingstone

David Livingstone

When Citigroup’s Jim Cowles announced late 2018 that he was leaving the company after a whopping 39 years, the bank set about finding a new CEO for its Europe, Middle East and Africa (EMEA) operations. Fresh from a successful stint as Citi’s chief country officer for Australia and New Zealand, David Livingstone stepped up to the plate in February 2019. 

Mr Cowles left big shoes to fill, but Mr Livingstone, with 32 years of experience at top investment banks across the globe, was more than up to the challenge. Mr Livingstone made his name in the advisory business, working on the merger and acquisitions (M&A) desks for Goldman Sachs, HSBC and Credit Suisse in various markets, from London and Singapore to Sydney and New York, before joining Citi in Australia in 2016.

Career history: David Livingstone  

  • 2019 CEO for EMEA, Citigroup
  • 2016 Country officer Australia and New Zealand, Citigroup
  • 2013 Vice-chairman for investment banking and capital markets EMEA, Credit Suisse
  • 2010 CEO, Credit Suisse Australia
  • 2007 Head of M&A Europe, Credit Suisse
  • 2004 Head of investment banking advisory EMEA, HSBC

His extensive experience of delivering strategies in various geographies during different points in economic cycles serves him well in his current role. "Over the three decades of my career, I have seen different market cycles and how they have been resolved, from the deregulation and privatisation phase in the 1980s and 1990s, to the tech/telecom boom and bust in the early 2000s, to the 2007-08 financial crisis," says Mr Livingstone. Though worldwide market conditions have been challenging over the past 12 months, he remains sanguine.

"It is important to manage the here and now, but also to focus on the big structural changes affecting long-term strategy by putting things in context," says Mr Livingstone, adding: "What do these deeper cycles mean for global economies, for corporates, for governments and for consumers?" The key to continued success as a global universal bank lies in continually trying to answer these questions, according to Mr Livingstone.

Mission statement

Citigroup is known in the industry for its large geographical footprint and the huge span of activities and services it offers. "What sets Citi apart from peers is its global network in the broadest sense: in terms of product capability, geographical footprint and its network of people and local knowledge," says Mr Livingstone. Citi has a physical presence in 55 countries in the EMEA region alone. 

This region generated $11.5bn in revenues over 2018 for Citi, contributing 17% of the bank’s total net revenues for the year. It consistently ranks in the top five league tables for M&A, debt capital markets and equity capital markets in the region in terms of revenues and in terms of deal volume, but there is always room to improve.

"Our mission is to enable growth and progress," says Mr Livingstone, adding that in practice this means providing and tailoring services and product capabilities to clients' demands. He emphasises Citi's reputation for consistency and professionalism, but concedes there are areas where it is performing below its capacity.

"Areas of focus include M&A, where we could be stronger in terms of market share,” he says, adding that the quality of the bank’s advisory services is not in question. “In the equities business, the goal is for us to move towards a top five position in EMEA," adds Mr Livingstone. 

Emphasis can be tilted as needed, but Mr Livingstone stresses that all investment banking activities are of interest in EMEA. He is not running his operation on a single theme or a single engine. Citi provides both experience and guidance in its advisory business, not just for the next six months, but over longer horizons, he notes.

Push for digitisation

As a global network bank, Citi maintains a steady course in terms of its big-picture strategy. The greater challenge lies in tactics, according to Mr Livingstone. "Underneath the surface, huge change is taking place. While tech disruption in financial services is not new, the pace of development is faster than ever," he says. 

Disruption is most acutely felt on the retail side, with rapid growth in direct-to-consumer financial services businesses, but this is bleeding into institutional finance too. Technological advancements can also provide opportunities for banks to bring down costs, expand the potential to scale up certain products, and make transactions and processes faster, more transparent and easier.

The increased focus on data gathering and analytics has made higher quality information more readily available, which is helpful to clients in their decision-making process, according to Mr Livingstone. Staying on top of the latest tech developments requires a lot of internal investment, but pays great dividends in terms of efficiency and generating new business. 

"The goal is for the client experience to be seamless, no matter the service we provide," says Mr Livingstone. Though perhaps not the most glamorous side of tech innovation, making the onboarding process for clients as fast, simple and secure as possible is extremely important.

Tech support

On the other side of the fence, promising digital disruptors are cropping up across the globe, and not just in developed markets. Initially they work on an idea in their domestic markets, but they often expand internationally relatively quickly. 

"These companies require cross-border capabilities and as they expand they will need to employ and pay people in different geographies in different currencies and such. Citi is an expert in helping companies move beyond their domestic market," says Mr Livingstone.

The digital and tech boom has been fuelled by the huge expansion of private market capital over the past few years. Private equity (PE) and venture capital funds have more money looking for a good investment than ever before. New players are encroaching on their territory, however, as pension funds and sovereign wealth funds increasingly opt to invest directly. 

Recently, consortia made up of PE funds as well as direct investors have emerged, so the need for matching their desires and needs to the right investment structure is paramount, according to Mr Livingstone.

Europe and beyond

So far in 2019, financial markets have had a turbulent ride, contending with trade tensions between the US and China, an economic slowdown in Germany and the possibility of a no-deal Brexit under UK prime minister Boris Johnson. In August, the US Federal Reserve, which had been relatively aggressive in raising interest rates across 2018, decided to lower the interest rate for the first time in a decade.

"We hit peak US dollar interest rates and are in for another period of very low rates,” says Mr Livingstone. This means conditions for capital creation are still good: yield curves are flat or inverted, liquidity levels are high and generally supported by monetary policies. "Underneath though, confidence is an issue," adds Mr Livingstone. 

A protracted low and even negative interest rate environment makes it hard for institutional investors to match subdued returns to their ever-increasing liabilities as the global population ages. “Investors are still looking for yield, which makes investment in emerging markets more attractive," says Mr Livingstone.

Europe and EMEA are often used interchangeably, but Mr Livingstone points out that both Africa and the Middle East are a big focus for Citi. For instance, the Middle East, an area of major capital creation and deployment, has been undergoing big structural change. Mr Livingstone refers here to Saudi Arabia’s push to liberalise its capital markets and open up to investment.

There is no denying Europe has been hit harder than Citi’s domestic market in the US by negative geopolitical and macroeconomic factors. But Mr Livingstone urges greater focus on what may be gained from changes such as Brexit, rather than focusing on what might be lost. "Thinking about how things such as capital flows, trade and investment will change as a result can uncover opportunities," he says, adding that he looks beyond the "readiness for Brexit" rhetoric towards assessing the structural impact.

The same goes for the rest of Europe. The trick is to look beyond the situation on the surface and penetrate the deeper changes going on underneath. "EMEA remains a significant region for growth, but Citi recognises that compared with the deep and uniform US capital markets, the situation is more complex in this region," says Mr Livingstone. "It is more important than ever to monitor how some of the big structural dynamics in the eurozone evolve."

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