A little over a year ago, when Citigroup laid out a
Four quarters later, however, revenue growth in that segment remains challenged by fee headwinds and higher interest rates paid on deposits, particularly within Citi's private bank, executives told analysts Friday during the megabank's first-quarter earnings call.
For the quarter, global wealth management revenues dropped 9% year over year. In fact, over the past year, quarterly wealth revenues have been down or flat compared with each previous-year period.
Still, the $2.5 trillion-asset company is sticking to its global wealth blueprint, CEO Jane Fraser told analysts Friday during the company's first-quarter earnings call. She cited "a lot of potential growth in Asia" and plans to start "scaling up in the U.S." by building out investment offerings and cross-selling to Citi's new and existing clients.
There's also "tremendous potential growth" by tapping into Citi's private bank and family office franchises as well as referrals from other business lines, according to Fraser. "We are not shifting our strategy in wealth," she said.
Citi will soon
Sieg has "deep product and digital expertise" and is "a proven people leader," Fraser said, adding that Citi "will certainly be taking full advantage of his expertise and experience in the U.S."
"His mandate is consistent with the strategy we laid out at investor day," Fraser said, referring to an event held in March 2022. "So the core of the strategy will not be changing with him coming on board."
The
As part of an effort to "double down on wealth," Citi created
On Friday, both Fraser and Chief Financial Officer Mark Mason mentioned several positive developments in global wealth management, including a 3% increase in the number of client advisors on staff and an uptick in new client acquisition. That client acquisition occurred in both the private bank and through Citi's "Wealth at Work" program, which provides financial and wealth services to professionals.
In addition, there were "notable improvements" in Asia, where global wealth management revenues rose about 20% from the fourth quarter of 2022, Mason said. The company has also been adding new products, he added.
"I feel like we are positioning ourselves for when this turns," Mason said.
When asked by an analyst if Citi has any appetite for growing its global wealth management unit via acquisition, Fraser didn't slam the door shut on potential opportunities. But she did say the company is concentrating on growing organically by making use of existing client relationships.
"I'm sure if something very attractive comes up, we'll be very interested and looking at it," Fraser said. "But it's not something right now that I think makes sense, given where we're focused."
For the quarter, Citi reported total revenues of $21.4 billion, up 6% year over year, excluding the impact of selling certain overseas consumer franchises. Net income was $4.6 billion, which included $953 million related to the sale of Citi's consumer business in India, the company said.
That compares to net income of $4.3 billion during the first quarter of 2022.
Taking out those same divestiture-related impacts, expenses rose 5% from the year-ago period as the company incurred costs related to its ongoing risk management overhaul and other risk and control investments, which led to an increase in staffing, salaries and benefits.
Citi's forecasted revenue and expense guides for the year remained unchanged.
Deposits totaled $1.3 trillion, which was relatively flat year over year, in part because some wealth customers moved their deposits into fixed-income investments, the company noted.
Citi saw just under $30 billion of deposits flow into its system between early March and the end of the month, as customers yanked their deposits out of other banks amid industry turmoil.
Many of those deposits were tied to the commercial middle market base, and while it's too soon to tell how deposit betas will evolve, "a good portion" of those deposits will "likely be sticky," Mason said.
