HONG KONG - Timothy Kelley has been around the world and seen banking in all its permutations.
But he has never experienced an environment as crazy with competition as the one he now wakes up to every morning.
Here in Asia's bustling hub of commerce, Mr. Kelley runs Citicorp's 20-branch, $5 billion-asset franchise.
Since he became general manager of Citibank's Hong Kong consumer banking unit three years ago, Mr. Kelley has helped introduce innovative products and technological improvements.
"Hong Kong is a place that has very little regulation to it, so we're able to do just about everything," says the wiry, be-spectacled 20-year Citibank veteran.
"It's like the good old days of the Wild West in the United States.
"It's an incredibly competitive environment. You have to be quick, adept and maintain very good people to succeed.
"And we're a big player here," he adds, "a leader in this marketplace."
An initial glance at the numbers might lead some to question Mr. Kelley's boast. Among the competitors here are big hometown rivals, including Hongkong Bank, with $146 billion of assets spread across Asia, and $41 billion-asset Standard Chartered Bank.
Hongkong Bank, a unit of London-based HSBC Holdings PLC, has 250 branches here. Another competitor, $35 billion-asset Hang Seng Bank, has 129 branches, including one in each of Hong Kong's subway stations.
A few other American banks, including BankAmerica Corp. and Chase Manhattan Corp., run limited branch activities here as well.
But a quick look at Citibank's consumer banking headquarters in the base of a towering, glass skyscraper in the colony's Wanchai district illustrares what makes Citibank successful.
On a recent afternoon, a 30-strong line of blue-collar workers wait patiently in line outside a Hongkong Bank branch. Next door, well-dressed customers stream in and out of a Citibank branch.
Citibank, Mr. Kelley says, wants its customers to wait no longer than three minutes for service.
To achieve that kind of speed, with only a fraction of its competitors, branches, requires several things - not the least of which is fewer customers.
The bank demands a minimum deposit of HK$ 50,000, or about $6,500. "We want well-to-do who require a lot of financial services," Mr. Kelly says. "We're not interested in the person who just wants a small savings account."
The result: 100,000 "currency-savvy," fee-paying depositors with global ambitions.
The bank also offers those customers a tailored line of investment services and financial planning.
It helps them play the foreign currency arbitrage markets and offers sophisticated leveraged accounts that can invest at five times the level of an account balance.
Fully half of Citibank's Hong Kong balance sheet is measured in foreign currency.
But perhaps the most important factor in Citibank's success with its upscale clientele is its heavy use of technology.
Mr. Kelley calls the bank's telephone servicing center "our biggest branch."
Occupying an entire floor of the same building where consumer banking makes its home, the servicing center resembles an ordinary branch, right down to the carpeting. Tellers, each with an average 10 years of experience, handle customer calls.
Automated teller machines, with display boards in 10 language, also get heavy use here.
Hong Kong provides a perfect window into Citibank's vision for the future.
The company has cut its branch count here by six, to 20, over the past three years, while filling its remaining outposts with more investment services.
Trimming its physical presence in a place as outrageously expensive as Hong Kong is crucial. Earlier this year, a one-car parking spot sold for $500,000, while rents in general have nearly doubled since 1992.
Says Mr. Kelley. "Some of our competitors are going to have to confront the fact that they have huge investments in brick and mortar" which add heftily to expenses even as bank margins shrink from greater competition.
"The number of branches is irrelevant, especially in a very small geographic area like this," he adds. "Only the quality is important."
Citibank's success in Hong Kong mirrors what has become the envy of the world banking community.
"As a global retail banker, they're the only ones," says Harry Wilkinson, Hong Kong regional manager for Chemical Bank.
Citicorp wants to become the "McDonald's of the banking world," executives say, by offering seamless, high-quality service and technology to wealthier customers on a global scale.
Already, the company has nearly 800 consumer branches in 41 countries outside the United States. In 1992, (the most recent year for which figures are available), those branches accounted for 55% of its consumer banking operating revenues.
Last year, the company's 114 branches in Asia served some 3.5 million customers, including credit card holders, and generated about $1.1 billion of revenues.
Mr. Kelley won't divulge the Hong Kong operations, return on assets or on equity, but he says both are "extremely high"
One of the largest contributors to those returns is the credit card business, which is No. 2 in Hong Kong with 700,000 cards issued. (Hang Seng Bank is No. 1.)
Citibank Hong Kong also offers financial planning, la mutual funds (mostly nonproprietary) and a full line of insurance and mortgage products.
Lending money to Hong Kong's 98% ethnic Chinese population does not, Mr. Kelley says, carry the same risks as at home.
He says one of his biggest kicks at corporate meetings is announcing his figures for mortgage writeoffs: "We don't have any"
The reasons are largely cultural. Hong Kong, like much of Asia, has a savings rate of about 30%.
"They work hard and they save,"Mr. Kelley says. "And if they get in trouble, they have extended families to help out."
But it is with innovative premium services that Citibank excels here. The 52-year-old Mr. Kelley's sparsely furnished, 38th-floor office features one wall filled with posterboard advertisements of Citibank products.
One of which he is particularly proud is called "Interest Maximizer," a unique time deposit created by Citibank planners to get around Hong Kong's 10% inflation. rate, and even faster-rising real estate values. Inflation discourages depositors from making long-term deposits, and has the potential to cause liquidity problems.
Interest Maximizer is essentially a one-year CD that carries a unique promise.. If the monthly rate ever exceeds the 12-month rate, Citibank will pay the monthly figure instead.
Citibank launched the popular program in early 1993 and within two months every other bank in the colony had a similar offering. Cars were given away in a drawing open to those who signed up for the product, and within a month two other banks had cars sitting in their lobbies.
"There are some banks here that simply copy us. That's their strategy," Mr. Kelley concludes. "You don't have to reinvent the wheel here, just grab someone else's idea and run with it."
For Mr. Kelley, who moved here from Germany where he headed Citibank's 300-bank operation, the need for rapid implementation of new product ideas is a mind-boggling lesson in culture.
"In Germany, you come up with an idea, you analyze it, discuss it, bring in an advertising agency," he says. "And maybe a year later, it is flawlessly launched.
"Here, you quickly look over your shoulder, shut the door, put a code name on it, and work like the dickens to get it out in three months. If you don't do that, its either going to slip out, or someone else will come up with it."
Like other Hong Kong companies, Citibank is concerned about what changes will come when the colony is taken over by China in 1997.
The company's predecessor, the International Banking Corp., first opened branches in Shanghai and Hong Kong in 1902.
While officials say they have received assurances from Beijing that Hong Kong will remain a vital banking center, they also admit they are taking a more cautious approach as the deadline draws near.
"It's a question mark," Mr. Kelley says. "So we're being very cautious. . . and focusing on things like investment services and foreign exchange that aren't risk-related.
"It's proper business management," he adds with a touch of irony, "not to go crazy here."