Financial Results
Net Income Slips At Citigroup's Personal Banking, Wealth Management Arm
A variety of forces reduced the net income figures at the US bank's personal and wealth management business in Q2.
Net income at the personal banking and wealth management (PBWM) division of Citigroup declined to $494 billion in the second quarter of 2023, down 11 per cent from a year ago, while total revenues, after interest costs, rose 6 per cent to $6.395 billion, the US bank said.
Within the private bank, which focuses on ultra-high net worth clients, revenues were $605 million, a fall of 19 per cent in the same quarter of 2022. Across all global wealth management business, revenues fell 5 per cent to $1.8 billion, Citigroup said in a statement.
Total operating costs in PBWM rose 5 per cent to $4.204 billion. This was driven mainly by risk and control investments, Citigroup continued.
Total client assets in global wealth management stood at $764 billion, up 5 per cent.
“We are on track with the plan we laid out at Investor Day and remain committed to reaching our medium-term return targets,” Jane Fraser, chief executive of Citigroup, said. “We ended the second quarter with a CET 1 [Common Equity Tier 1] ratio of 13.3 per cent, which was 100 basis points above our new regulatory requirement that goes into effect in the fourth quarter. We returned a total of $2 billion in capital to our shareholders through common dividends and share buybacks and we will continue to review our level of capital return on a quarter-to-quarter basis.”
Some results in wealth management were mixed, the overall trend is encouraging, Fraser said.
“And while wealth revenues were down, we are attracting new clients and seeing growth in segments such as Wealth at Work,” she added. (Wealth At Work delivers wealth services to white-collar professionals in sectors such as law, asset management, and private equity.)
Across the entire Citigroup business, it logged net income in Q2 of $2.9 billion, down 36 per cent from net income of $4.5 billion a year ago. Q2 results were hit by higher costs, higher costs of credit and a fall in revenues.
