Citi announced Wednesday that it will combine two of its wealth management businesses, one for the uber wealthy and the other for the affluent, into a new business called Citi Global Wealth.
The new business will fuse Citi Private Bank with Citi Personal Wealth Management and be supported by teams from their respective former owners: the institutional client group (ICG) and global consumer banking (GCB).
Citi private bank, managed by ICG, serves 25% of the world’s billionaires, according to a company announcement. The $550-billion business unit provides wealth management services to over 1,400 family offices worldwide and 13,000 ultra-high-net-worth clients whose net worth is $100 million and above.
On the other end of Citi’s wealth offering spectrum is its personal wealth management, which is attached to consumer banking products such as CitiGold, CitiGold private client and Citi priority. GCB manages approximately $200 billion in client assets across the U.S., Europe, the Middle East, Asia and Mexico.
These two businesses coming together provides Citi the opportunity to grant more access to institutional products and coordinate services around each stage or phase of a client's life.
“Creating a unified wealth organization will help us to deliver the full, global power of Citi to clients while ensuring that we preserve the products, capabilities and expertise of the Private Bank and Consumer Wealth businesses,” said Jim O’Donnell, head of Citi Global Wealth and former global head of investor sales and relationship management, in a statement. O’Donnell reports to GCB CEO Anand Selva and ICG CEO Paco Ybarra.
The restructuring comes as GCB President and CEO Jane Fraser succeeds CEO Michael Corbat in February. The two said in a company memo on Wednesday that Global Wealth will be “a key differentiator and source of enhanced returns for Citi” and is “an important element of [Citi’s] strategy going forward.”
Analyst Jeff Harte at Piper Sandler & Co. sees this consolidation as a continuation of Michael Corbat’s aim to integrate Citigroup’s businesses.
In 2019, Citigroup consolidated its trading business with its prime brokerage unit that deals with institutional investors. Bloomberg reported that the bank had plans to lay off hundreds of equity and fixed income traders. Harte said Citi would likely make some positions, such as back office support, redundant with this merger, as well.
“They’ve got the right mix of businesses they want because they’ve sold a lot and added in a lot. Now, the next thing is to integrate those businesses across global Citigroup,” he said.
By consolidating the businesses, Harte foresees Citigroup achieving reduced costs, growing sales, operating efficiency and more shared data about customers.
This has been updated to include analyst Jeff Harte's comments.
