�Laura J. Keller and Dakin Campbell Bid/ask
▶ ▶ In the Ecuadorean city of Cuenca, locals blame expats for pushing up property prices ▶ ▶ “The wave of migrants has▶…▶begun to generate friction”
Corbat said Citi was focusing more on “target clients.”
At Deutsche Bank, CO-CEO John Cryan said late last year that the bank will cull its client list by half in certain business lines. Bank executives have also spoken of target clients in the division that handles trading, where some 500 customers generate 80 percent of revenue.
Goldman Sachs Group’s equity research team has also directed its resources toward heavy-volume hedge fund shops, according to someone familiar with the bank’s policies. Representatives of Goldman Sachs and Deutsche Bank declined to comment.
Even smaller regional banks have lists, with Stifel Financial dubbing a roster of 21 target clients its “Blackjack” list, according to a person familiar with the matter. CEO Ronald Kruszewski says he’d be “surprised at any firm that is trying to sell a product that didn’t have a list.”
This chase for a few prized clients has been spurred by dwindling revenue in some bank business lines. Post- crisis regulations have made it harder for banks to make money by forcing them to hold more capital against risky assets. In this environment, “everyone is talking” about how to boost profitability, says Greg Braca, head of U.S. corporate and specialty banking at TD Bank.
To make the cut for Citigroup’s favored list, firms typically must generate $2 million annually in trading revenue with the bank. Each of the Focus Five firms trade multiple times that amount. Representatives of all five declined to comment.
“It’s a dog-eat-dog world,” says Kevin Kelly, the chief investment officer for Recon Capital Partners in New York. “Its tough, but that’s just how it works.” Some say the odds of success on Wall Street are tilted more and more toward those with the deepest pockets. Says Jeff Sica of Circle Squared Alternative Investments in Morristown, N. J.: If you’re not a big client, it’s become “a major disadvantage.”
The bottom line Citigroup and others on Wall Street have focused their businesses on the care and feeding of a smaller number of top clients.
Edited by Pat Regnier Bloomberg.com
Susan Lamy and her husband, Jean Pierre, owned a successful interiordesign business in Westport, Conn., but they still worried about how they would make ends meet in retirement. “Just paying for the basic necessities was killing us, and we could see that there was no way that we would ever be able to stop working,” says Lamy.
The search for an affordable retirement spot led the couple to Cuenca, a Unesco World Heritage site in Ecuador’s southern Andes. They settled there in 2013 and now live in a spacious apartment with a terrace overlooking the Yanuncay River. Lamy says she and her husband enjoy a high standard of living in Cuenca for around $2,500 a month, paid for by their Social Security checks: “This seemed to be the best possibility for having a really terrific life on a fixed income.”
The combination of a subtropical climate, well-preserved colonial architecture, and low cost of living has made Cuenca a magnet for North American and European retirees—an estimated 5,000 now call the city of 500,000 home. Senior citizens also benefit from subsidized health care and medicine, discounted transportation, and a busy calendar of free cultural events sponsored by the city.
While some retirees have opened cafes and small stores, Ana Paulina Crespo, director of external relations for the city’s municipal government, says the new arrivals haven’t made significant contributions to the local economy. One sore point is that many rely on Ecuador’s health-care system, where the tab for heart bypass surgery is about $10,000, or less than onetenth the cost in the U.S. “The wave of migrants has been growing, and it’s begun to generate friction,” she says. “Our biggest challenge right now is to find ways to benefit from all the foreigners.” The municipality is developing policies to better integrate the immigrants, including pairing retirees who have expertise or specializations with local universities and creating opportunities for them to volunteer in the community.
When the swell of international pensioners began about six years ago, local real estate developers initially thought the new arrivals would be wealthier Americans interested in buying properties, says real estate agent Maribel Crespo, a distant relation to the mayor’s aide. Instead, most turned out to be middle-class retirees from the U.S. who live on about $1,500 to $2,000 a month and choose to rent instead of buy homes. A two-bedroom condo goes for about $700 a month, Crespo says.
Still, building costs have almost
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