Citigroup, like many of its rivals, has in recent years more closely aligned its prime brokerage, derivatives and securities services arms but the US bank is unusual in that it has significantly grown this business while most banks have been actively shrinking their client books.

The US banking giant said in mid-July its securities services unit saw second quarter revenue rise 10% to $584 million. The bank has also seen its derivatives business rise up the league tables, partly due to successes among the hedge fund community.

Okan Pekin, the global head of prime, futures and securities services at Citigroup whose remit was recently expanded to include direct custody and clearing, said the bank has come a long way in four years.

He told Global Investor: “When we started in late 2013, Coalition ranked Citi #9 in the exchange-traded futures and over-the-counter clearing and now in 2017 we are ranked #3. This is a rare journey, to rise from #9 to #3 within four years and it does not happen without successful coverage of hedge funds.”

The bank said it has grown its client balances in prime brokerage and Delta One Derivatives by 68% since the start of 2014.

While Citigroup has made ground on largest prime brokers Goldman Sachs and JP Morgan, it has also maintained its leading position as a service provider to long-only asset managers and pension funds.

Pekin said: “Our business is a combination of prime finance, futures and securities services. We have built long-standing relationships with global investors. They require advanced technology and a global platform. The majority of our relationships tend to be long term and ‘sticky’. Our clients prefer not to move between banks from one day to another. Global clients require capital strength and commitment.”

The bank said its core tier one capital ratio is 13% while its supplementary leverage ratio is 7.2%, making Citigroup one of strongest banks in the market.

Pekin added: “The most critical thing is the ability to have top level conversations with senior clients on capital and resource allocation and how Citi’s product platform can be leveraged in areas that matter most to our clients.”

Collateral management is a priority for Citigroup’s (and its rivals’) clients and this is unlikely to change as more types of clients, specifically corporates and asset managers, are bound by collateral rules and firms increasing look to optimise their use of collateral.

Pekin said: “As one of the largest derivatives providers, we believe we are in a unique position to give the clients not just the management tools for posting collateral and managing liquidity, but also for optimising that collateral. This is a task of higher degree of complexity.”

Pekin also sees more peer-to-peer lending in the agency securities lending space to help address the collateral squeeze.

He said: “We have focused on developing sound trading structures and associated infrastructure to facilitate these flows and enable our clients to deal directly with other similar institutions. The benefits for our clients include increased counterparty diversification as well as higher fees and stable balances. We anticipate growing volumes in the coming years as regulatory requirements coming into effect will encourage more participants to enter into this space.”

Part of Citigroup’s success has been down to its commitment to technology, according to Pekin.

“Ultimately the future is about fewer hands in the process: the more machines communicate and execute with machines, the better. People can do more valuable things. There is a huge focus in our organisation to remove manual interaction that can be prone to errors and delays, and replace it with automation and robotics to improve client experience and drive efficiency.”

He continued: “We are introducing advanced technology robotics in artificial intelligence (AI) and big data analytics into our offering. We have innovation centres in Tel Aviv, Dublin and Singapore and we now have several people dedicated to our business in AI research.”

The obvious challenge facing all US banks based in London is Brexit and how that might complicate these firms continuing to trade into Europe and service their clients on the continent.

Citigroup is well advanced in its thinking, according to Pekin who added: “We are planning to set up a second EU-based broker-dealer out of Frankfurt. Depending on the outcome of the Brexit negotiations, that may result into a creation of 150 new roles, not just in Frankfurt but also in other EU locations where we have an historic presence including Dublin, Luxembourg and other EU cities.”

The bank is keen to point out that already over half of its European staff are based outside of the UK so it is already geographically diversified.

Citigroup has also been adding senior staff to its long-established Dublin business.

The bank hired in August Dublin-based Sean Tuffy from Brown Brothers Harriman as EMEA head of market and regulatory intelligence, and Patrick O’Brien who joined from JP Morgan as head of fund services in Ireland and head of offshore business development for Ireland and Luxembourg.

Pekin and Citigroup’s global head of futures, clearing and collateral management Jerome Kemp is set to hire in September Sabrina Wilson, a rising star of the European derivatives industry and former managing director at Deutsche.