Citi wealth says 'strategy is working' as net new assets surge

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Citi wealth says 'strategy is working' as net new assets surge.

general :: 2025-04-16 :: source - financial planning

By Elijah Nicholson-Messmer

Citi executives said its wealth division is making "excellent progress" under Andy Sieg, the firm's head of wealth. The division reported a 489% surge in its new investment assets in the fourth quarter.

Citi reported $16.5 billion in net new investment assets for the last quarter of 2024. That metric, which evaluates wealth managers' performance independently of market fluctuations, contributed to a 24% increase in revenue for the megabank's wealth division, reaching $2.1 billion (excluding interest expenses).

Citi began reporting net new investment assets in the fourth quarter 2024, citing it as part of a "strategic priority for the Wealth business to accelerate growth in Client Investment Assets and the associated investment revenue," according to a footnote in its quarterly earnings presentation. That metric includes dividends and interest payments but excludes market gains, fees and commissions.

The wealth division reported an organic growth rate of 11% over the last 12 months, which it defines as the sum of net new investment assets for each quarter from the second quarter of 2024 through the first quarter 2025, divided by client investment assets from the first quarter of 2024

Building out a new tech suite

In a call with analysts Wednesday, Citi CEO Jane Fraser said the wealth division has "real horsepower and firepower in our investment capabilities" thanks to investments in improved client experiences and technology at the firm.

Last year, Fraser said during a second-quarter earnings call that the company is working to address "decades of underinvestment" in Citi's infrastructure. Speaking at Bank of America's Securities Financial Services Conference in February, Sieg said that technology in Citi's wealth division has been a "limiting factor."

"The Citi-wide focus on topics like data and our overall technology architecture ... creates a tailwind for us, which is a good starting point," Sieg said. "We've got partners like Palantir and Google and Snowflake around our cloud architecture that are putting us in position to make progress, we think, in months, which once in my career would have been years of progress to move the platforms forward."

Despite the firm's renewed interest in improving its technology infrastructure, the wealth division reported lower technology expenses overall in the first quarter.

Tech savings, along with cost-cutting measures, weren't enough to offset increased costs from higher revenue-related expenses and higher severance offerings. Citi's wealth division reported $1.64 billion in total operating expenses, up 5% from the previous quarter.

Income and revenue up

The firm is off to a strong start in the first quarter of this year, with $2.1 billion in revenue yielding $284 million in net income. That was up 62% over the same period last year.

A significant portion of the firm's revenue growth stemmed from its Citigold unit, which serves clients with $200,000 or more in assets. Last year, Citi introduced a recruitment strategy targeting advisors who generate $1 million to $2 million in annual revenue, offering them upfront and deferred loans equivalent to 100% to 250% of their production.

Citigold posted a 24% year-over-year revenue increase, reaching just over $1.16 billion in the first quarter. The firm's private bank, focused on serving high-net-worth clients, saw its revenue grow 16% year over year to $664 million. Meanwhile, the Wealth at Work unit, which caters to law firms and other professionals, also delivered strong results with a 48% year-over-year revenue jump to $268 million.

Across Citi's wealth units, the firm reported making $646 million of its total revenue from commissions and other fees, up 14% year over year. It also reported nearly $1.3 billion in net interest income, up 30% from the same period last year.

"In this environment, around the world, clients are really looking to us for advice because there are not many global wealth managers," Fraser said during Citi's earnings call. "So we are a destination of choice right now, and we're taking full advantage of it. I don't see that changing. This is the strength of Citi. The strategy is working."