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Citibank launches action against defectors

Intensifying competition between private banks in Asia for staff and clients has spilled into Singapore's courts with Citibank starting legal action against a group of its former relationship managers for allegedly taking proprietary information believed to include details of wealthy clients.

According to a report in Singapore's Business Times (BT) newspaper, the seven managers, understood to be former advisors with CitiGold, the bank's priority banking service, have been poached by UBS but not all have started work with their new employer.

Headhunters in Singapore says the legal action reflects the huge pressure new employees are under to justify their hefty salary packages. "Because banks have to pay so much to bring new managers on board, they are asking them to bring assets under management across with them either in the form of new clients or existing clients," says Chia Tek-Yew, financial services industry partner at Heidrick & Struggles in Singapore.

"The only way many guys can do it in a short period is to bring clients across. That's why banks are now starting to get antsy about their clients as well as their staff."

Chia says clawback features which allow banks to recoup some of the big sign-on fees paid to wealth managers if assets do not materialize are becoming standard in the contracts of more senior or group hires. "There is a lot more skepticism among banks now because a lot of promised assets under management have not turned up," he says.

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