Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Citigroup has ratcheted up performance targets for its private bankers, setting goals that some fear are unachievable as the lender seeks to jump-start its money management business.
The revised aims involve net revenue and the value of assets clients entrust to Citi to invest, a priority area for a bank that has traditionally been more of a lender than a money manager for wealthy clients. In some cases, the net revenue targets are to double the level for 2026 from a year ago, according to people familiar with the matter. Each banker’s targets are set individually.
The aggressive goals reflect the ambitions of Andy Sieg, the head of Citi’s wealth business. But they have also been met with frustration internally, given the targets will be used when assessing bankers’ performance evaluations and year-end bonuses.
“It’s just not even possible,” one Citi banker said of the targets that had been handed down.
A major challenge for Sieg is boosting the division’s net new investment assets — the difference between client inflows and outflows — a metric he has described as his “north star” and which fell by more than 50 per cent year on year in the fourth quarter.
“As our private bank’s performance has strengthened, expectations for colleagues have risen accordingly,” a Citi spokesperson said. “We also remain committed to a transparent performance and compensation framework that aligns with our strategic objectives and evaluates colleagues on a broad range of factors, including the value they deliver to clients and Citi.”
The push comes as Citi is preparing to host a highly anticipated investor day in May, in which the bank is set provide updates on the progress of its high-stakes revamp led by chief executive Jane Fraser. The bank is targeting returns on tangible common equity — a key measure of profitability for the wealth business — of 15 to 20 per cent this year, and more than 20 per cent in the long term. But analysts expect these targets could be updated in the bank’s quarterly report later this month or at its investor day.
Citi’s private bank caters to clients with a net worth of at least $10mn. Its wealth division also includes its lower-end wealth business Citigold and its workplace offering. It has been contending with an exodus of senior staff, lacklustre client growth and the aftermath of a now-concluded probe into Sieg’s management style.
Citi’s wealth management business stagnated after it sold its Smith Barney retail brokerage business to Morgan Stanley following the 2008 financial crisis.
Today, Morgan Stanley, JPMorgan Chase and BofA are far larger in wealth management than Citi. The business has become a key growth driver for major banks because of its strong margins and the perceived predictability of its revenues, unlike volatile investment banking and trading.
Revenues at Citi’s private bank increased 12 per cent in 2025 to $2.7bn. By comparison, revenues at JPMorgan’s private bank rose 9 per cent to more than $12bn.
“The burden is on Citigroup to prove the strength of its wealth business line and show that the last quarter of a century of underperformance could change,” said Wells Fargo analyst Mike Mayo.
Citi chief Fraser poached Sieg from BofA in 2023 where he was president of its Merrill Lynch wealth management division.
Sieg had already revamped pay at the private bank to place greater emphasis on bringing in assets and less on selling new loans such as mortgages.
These investment assets are more highly prized by investors because they are seen as more recurring and also less risky but the battle to win that business is very competitive.
Credit: Source link
