Citi‘s wealth division reported a steep drop in net new investment assets in the second quarter of 2025 as market turmoil shook investor confidence.
Those assets, which include dividends and interest payments but exclude market gains, fees and commissions, dropped to $2 billion in the second quarter, marking an 81% decline year over year.
“We did see inflows slow this quarter as clients were cautious amidst macro uncertainty,” Citi CEO Jane Fraser said in an earnings call Tuesday. “We are confident we will see a pickup here as markets have recovered.”
Despite the decline, the wider megabank reported a 135% increase in net income compared to the same period last year, reaching $494 million. Citi‘s wealth unit reported $2.2 billion in revenue, a 20% year over year increase.
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Citi‘s wealth division reported an organic growth rate of 9% over the last 12 months. The wealth division’s operating expenses increased by 1% year over year to $1.6 billion.
Citi simplifies its wealth business
In May, Citi completed the sale of its alternative investments unit, Citi Global Alternatives, to the fintech company iCapital in an effort to sharpen its wealth arm. While iCapital operates the alternatives platform, Citi will continue distributing the funds and advising clients on alternative investments.
On Tuesday’s call, Fraser said the partnership with iCapital will provide an “end-to-end solution for our alternative investment offerings.”
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Income and revenue increases
The firm’s Citigold unit, which serves clients with at least $200,000 in assets, generated $1.2 billion in revenue in the second quarter. The flagship unit accounted for more than half of the wealth division’s total revenue this quarter and marked a 21% year over year increase.
Citi‘s private bank unit, which mostly serves high net worth clients, saw a 20% year over year revenue increase to $731 million. The bank’s Wealth at Work unit, which serves law firms and other professionals, saw a 13% year over year revenue increase to $221 million.
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The wealth division made $370 million in revenue from commissions and other fees, representing an 8% increase from the same period last year. Net interest income increased 22% year over year to $1.3 billion.
Fraser said that the market outlook has been better than expected.
“It’s proven to be more resilient than most of us anticipated,” she said. “But we aren’t dropping our guard as we begin the second half of the year.”