Citigroup has revealed plans to lift its prime brokerage balances to more than $700bn by 2028, a level that would be more than three times its 2022 total, reported Bloomberg.
At the bank’s investor day, a presentation showed prime balances of $200bn in 2022, with a target of $450bn in 2025 and more than $700bn in 2028.
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Prime brokerage covers the provision of cash and securities to hedge funds so they can carry out trades.
Citigroup said the business was one of its investment priorities, with spending aimed at expanding coverage, capacity and analytics.
The bank has for years sought to build its prime equities operation, where it faces strong competition from larger Wall Street rivals, the publication noted.
Its equities business is still among the smallest within the US banking sector, despite its long-established position in rates and fixed income.
“The clients we’re building with are already Citi’s clients,” Andy Morton, the bank’s head of markets, said in a presentation.
“They’re usually clients of our dominant fixed-income franchise — they know us, they like us, they want to put balances with us.”
Reuters reported that Citi has been placing more attention on wealth management.
The division remains smaller than those of its competitors, but Fraser has rejected speculation about possible M&A to narrow that gap, saying the bank was concentrating on organic growth.
The wealth business oversees $1.3tn in client assets and recorded a ROTCE of 10.8% in the first quarter.
Fraser also said AI could support near-term performance in the wealth unit. The division has introduced an AI initiative called Sky to assist with client interactions.
“While we know that will take a while, there is no reason we can’t be one of the fastest-growing wealth businesses right now,” Citi’s wealth head Andy Sieg said.
