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C » Topics » GLOBAL WEALTH MANAGEMENT

This excerpt taken from the C 10-Q filed May 5, 2006.

GLOBAL WEALTH MANAGEMENT

         LOGO

        Global Wealth Management is composed of the Smith Barney Private Client businesses (branded Citigroup Wealth Advisors outside the U.S.), Citigroup Private Bank, and Citigroup Investment Research.

 
   First Quarter
   % Change
  
In millions of dollars
  
  2006
   2005
   1Q06 vs. 1Q05
  
Revenues, net of interest expense by region:                  
  U.S.   $ 2,154   $ 1,872   15 %
  Mexico     31     31   —  
  Latin America     43     58   (26 )
  EMEA     75     71   6  
  Japan     —     22   (100 )
  Asia     180     119   51  
   
 
 
 
Revenues, net of interest expense   $ 2,483   $ 2,173   14 %
Operating expenses     2,055     1,690   22  
Provision for loan losses     5     (16 ) NM  
   
 
 
 
Income before taxes   $ 423   $ 499   (15 )%
Income taxes     136     180   (24 )
   
 
 
 
Net income   $ 287   $ 319   (10 )%
   
 
 
 
Net income (loss) by region:                  
  U.S.   $ 228   $ 273   (16 )%
  Mexico     8     13   (38 )
  Latin America     3     7   (57 )
  EMEA     3     (1 ) NM  
  Japan     —     (8 ) 100  
  Asia     45     35   29  
   
 
 
 
Net income   $ 287   $ 319   (10 )%
   
 
 
 
Average risk capital(1)   $ 2,539   $ 1,993   27 %
Return on risk capital(1)     46 %   65 %    
Return on invested capital(1)     29 %   53 %    
   
 
 
 
(1)
See footnote 3 to the table on page 4.

NM Not meaningful.

37

This excerpt taken from the C 10-K filed Feb 24, 2006.

GLOBAL WEALTH MANAGEMENT

Global Wealth Management
Net Income
In billions of dollars		   Global Wealth Management
2005 Net Income by Product		   Global Wealth Management
2005 Net Income by Region*
LOGO   LOGO   LOGO

 
 
 
 
*Excludes Japan loss of $82 million.

Global Wealth Management is composed of the Smith Barney Private Client businesses (including Citigroup Wealth Advisors outside the U.S.), Citigroup Private Bank, and Citigroup Investment Research.

 
   2005
   2004
   2003
   % Change
2005 vs. 2004
   % Change
2004 vs. 2003
  
 
   (In millions of dollars)

  
Revenues, net of interest expense by region:                            
  U.S.   $ 7,628   $ 7,241   $ 6,596   5 % 10 %
  Mexico     124     138     117   (10 ) 18  
  Latin America     203     227     212   (11 ) 7  
  EMEA     295     291     260   1   12  
  Japan     (6 )   200     264   NM   (24 )
  Asia     440     432     398   2   9  
   
 
 
 
 
 
Revenues, net of interest expense   $ 8,684   $ 8,529   $ 7,847   2 % 9 %
Operating expenses     6,696     6,666     5,753   —   16  
Provision for loan losses     29     (5 )   12   NM   NM  
   
 
 
 
 
 
Income before taxes   $ 1,959   $ 1,868   $ 2,082   5 % (10 )%
Income taxes     715     659     736   8   (10 )
   
 
 
 
 
 
Net income   $ 1,244   $ 1,209   $ 1,346   3 % (10 )%
   
 
 
 
 
 
Net income by region:                            
  U.S.   $ 1,141   $ 1,179   $ 1,076   (3 )% 10 %
  Mexico     44     52     41   (15 ) 27  
  Latin America     17     43     44   (60 ) (2 )
  EMEA     8     15     (16 ) (47 ) NM  
  Japan     (82 )   (205 )   83   60   NM  
  Asia     116     125     118   (7 ) 6  
   
 
 
 
 
 
Net income   $ 1,244   $ 1,209   $ 1,346   3 % (10 )%
   
 
 
 
 
 
Average risk capital(1)   $ 2,113   $ 1,907   $ 1,896   11 % 1 %
Return on risk capital(1)     59 %   63 %   71 %        
Return on invested capital(1)     46 %   52 %              
   
 
 
 
 
 
(1)
See footnote 5 to the table on page 3.

NM
Not meaningful.

46

This excerpt taken from the C 8-K filed Jan 20, 2006.

GLOBAL WEALTH MANAGEMENT

 
   Fourth Quarter Revenues
    
   Fourth Quarter Net Income
    
  
 
   %
Change
   %
Change
  
 
   2005
   2004
   2005
   2004
  
 
   (In Millions of Dollars)

  
  Smith Barney   $ 1,781   $ 1,643   8 % $ 208   $ 230   (10 )%
  Private Bank     456     484   (6 )   89     (129 ) NM  
   
 
 
 
 
 
 
Global Wealth Management   $ 2,237   $ 2,127   5 % $ 297   $ 101   NM  
   
 
 
 
 
 
 
    •
    Smith Barney  

    —
    A 19% increase in fee-based revenues was partially offset by a 4% decline in transactional revenues.

    —
    Assets under fee-based management increased 34% to $321 billion, reflecting organic growth and the addition of Legg Mason. Net flows were $4 billion for the quarter and $28 billion for the full year 2005.

    —
    The pre-tax margin of 19% declined, reflecting integration costs of the Legg Mason retail brokerage business and increased compensation and compliance expenses.

    •
    The Private Bank  

    —
    Revenues and expenses declined, primarily due to the absence of the Japan business, which ceased business operations at the end of September 2005. Net income in the prior year period included a $400 million pre-tax charge for costs related to closing the Japan business.

    —
    Excluding Japan, revenues declined 1%, as client business volumes rose 8% to $226 billion, led by 14% growth in the U.S., which was offset by net interest margin compression.

    —
    Excluding Japan, income declined 28%, reflecting higher costs of front office sales and support, higher credit costs, and the absence of tax benefits recorded in the prior-year period.
This excerpt taken from the C 10-Q filed Nov 4, 2005.

GLOBAL WEALTH MANAGEMENT

        Global Wealth Management is comprised of Smith Barney Private Client, Citigroup Investment Research, and the Citigroup Private Bank. Through its Smith Barney network of Financial Consultants and Private Bank offices, Global Wealth Management is one of the leading providers of wealth management services to high-net-worth and affluent clients in the world.

        Smith Barney provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, non-profits and large corporations through a network of more than 12,000 Financial Consultants in more than 500 offices primarily in the U.S. In addition, Smith Barney provides independent client-focused research to individuals and institutions around the world.

        A significant portion of Smith Barney's revenue is generated from fees earned by managing client assets, as well as commissions earned as a broker for its clients in the purchase and sale of securities. Additionally, Smith Barney generates net interest revenue by financing customers' securities transactions and other borrowing needs through security-based lending. Smith Barney also receives commissions and other sales and service revenues through the sale of third-party mutual funds. As part of Smith Barney, Citigroup Investment Research produces equity research to serve both institutional and individual investor clients. The majority of expenses for Citigroup Investment Research are allocated to the Global Equities business within CIB and Smith Barney businesses.

        Private Bank provides personalized wealth management services for high-net-worth clients through offices in 31 countries and territories. With a global network of Private Bankers and Product Specialists, Private Bank leverages its experience with clients' needs and its access to Citigroup to provide clients with comprehensive investment management, investment finance and banking services. Investment management services include investment funds management and capital markets solutions, as well as trust, fiduciary and custody services. Investment finance provides standard and tailored credit services including real estate financing, commitments and letters of credit, while Banking includes services for deposit, checking and savings accounts, as well as cash management and other traditional banking services.

4

These excerpts taken from the C 8-K filed Sep 9, 2005.
Global Wealth Management is comprised of the Smith Barney Private Client and Citigroup Equity Research businesses and the Citigroup Private Bank.  Through its Smith Barney network of Financial Consultants and Private Bank offices, Global Wealth Management is one of the leading providers of wealth management services to high-net-worth and affluent clients in the world.

 

Smith Barney provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, non-profits and large corporations through a network of more than 12,000 Financial Consultants in more than 500 offices primarily in the U.S.  In addition, Smith Barney provides independent client-focused research to individuals and institutions around the world.

 

A significant portion of Smith Barney’s revenue is generated from fees earned by managing client assets, as well as commissions earned as a broker for its clients in the purchase and sale of securities. Additionally, Smith Barney generates net interest revenue by financing customers’ securities transactions and other borrowing needs through security-based lending.  Smith Barney also receives commissions and other sales and service revenues through the sale of third-party mutual funds. As part of Smith Barney, Citigroup Equity Research produces equity research to serve both institutional and individual investor clients.  The majority of expenses for Citigroup Equity Research are allocated to the Global Equities business within CIB and Smith Barney businesses.

 

Private Bank provides personalized wealth management services for high-net-worth clients through offices in 33 countries and territories. With a global network of Private Bankers and Product Specialists, Private Bank leverages its experience with clients’ needs and its access to Citigroup to provide clients with comprehensive investment management, investment finance and banking services. Investment management services include investment funds management and capital markets solutions, as well as trust, fiduciary and custody services.  Investment finance provides standard and tailored credit services including real estate financing, commitments and letters of credit, while Banking includes services for deposit, checking and savings accounts, as well as cash management and other traditional banking services.

 

GLOBAL WEALTH MANAGEMENT

 

In millions of dollars

 

2004

 

2003

 

2002

 

Revenues, net of interest expense

 

$

8,529

 

$

7,847

 

$

7,573

 

Operating expenses

 

6,666

 

5,753

 

5,562

 

Provision for credit losses

 

(5

)

12

 

24

 

Income before taxes

 

1,868

 

2,082

 

1,987

 

Income taxes

 

659

 

736

 

700

 

Net income

 

$

1,209

 

$

1,346

 

$

1,287

 

 

 

 

 

 

 

 

 

Average risk capital (1)

 

$

1,907

 

$

1,896

 

 

 

Return on risk capital (1)

 

63

%

71

%

 

 

Return on invested capital (1)

 

52

%

59

%

 

 

 

(1)   See Footnote (7) to the table on page 3.

 

Global Wealth Management reported net income of $1.209 billion in 2004, a decrease of $137 million or 10% from 2003, reflecting a decline in Private Bank, partially offset by double-digit growth in Smith Barney.  Private Bank net income of $318 million in 2004 decreased $233 million or 42% compared to 2003, reflecting a $288 million decline in Japan mainly due to a $244 million after-tax charge associated with the closure of Private Bank operations in Japan, as well as a decline in transactional revenue.  Excluding Japan, Private Bank income grew $55 million or 12%, driven by growth in recurring fee-based and net interest revenues, a lower effective tax rate and improved credit costs, which were partially offset by higher incentive compensation costs.  Smith Barney net income of $891 million in 2004 increased $96 million or 12% compared to 2003, primarily driven by increases in asset-based revenue and transactional revenue, partially offset by increased marketing expenses, legal and compliance charges and continued investment in new client offerings.

 

Net income of $1.346 billion in 2003 increased $59 million or 5% from 2002, reflecting double-digit growth in Private Bank, partially offset by a decline in Smith Barney.  Private Bank net income of $551 million in 2003 increased $90 million or 20% from 2002, primarily due to increased investment management and capital markets activity combined with growth in lending revenues, partially offset by increased incentive compensation associated with the higher revenues.  Smith Barney net income of $795 million in 2003 decreased $31 million or 4% from 2002, primarily due to lower earnings on capital, a higher effective tax rate and increased legal, advertising and marketing costs.

 

The table below shows net income by region for Global Wealth Management:

 

This excerpt taken from the C 10-Q filed Aug 4, 2005.

GLOBAL WEALTH MANAGEMENT

        Global Wealth Management is comprised of the Smith Barney Private Client and Citigroup Equity Research businesses and the Citigroup Private Bank. Through its Smith Barney network of Financial Consultants and Private Bank offices, Global Wealth Management is one of the leading providers of wealth management services to high-net-worth and affluent clients in the world.

        Smith Barney provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, non-profits and large corporations through a network of more than 12,000 Financial Consultants in more than 500 offices primarily in the U.S. In addition, Smith Barney provides independent client-focused research to individuals and institutions around the world.

        A significant portion of Smith Barney's revenue is generated from fees earned by managing client assets, as well as commissions earned as a broker for its clients in the purchase and sale of securities. Additionally, Smith Barney generates net interest revenue by financing customers' securities transactions and other borrowing needs through security-based lending. Smith Barney also receives commissions and other sales and service revenues through the sale of third-party mutual funds. As part of Smith Barney, Citigroup Equity Research produces equity research to serve both institutional and individual investor clients. The majority of expenses for Citigroup Equity Research are allocated to the Global Equities business within CIB and Smith Barney businesses.

        Private Bank provides personalized wealth management services for high-net-worth clients through offices in 33 countries and territories. With a global network of Private Bankers and Product Specialists, Private Bank leverages its experience with clients' needs and its access to Citigroup to provide clients with comprehensive investment management, investment finance and banking services. Investment management services include investment funds management and capital markets solutions, as well as trust, fiduciary and custody services. Investment finance provides standard and tailored credit services including real estate financing, commitments and letters of credit, while Banking includes services for deposit, checking and savings accounts, as well as cash management and other traditional banking services.

These excerpts taken from the C 8-K filed Jun 7, 2005.
Global Wealth Management is comprised of the Smith Barney Private Client and Global Equity Research businesses and the Citigroup Private Bank.  Through its Smith Barney network of Financial Consultants and Private Bank offices, Global Wealth Management is one of the leading providers of wealth management services to high-net-worth and affluent clients in the world.

 

Smith Barney provides investment advice, financial planning and brokerage services to affluent individuals, small and mid-size companies, non-profits and large corporations through a network of more than 12,000 Financial Consultants in more than 500 offices primarily in the U.S.  In addition, Smith Barney provides independent client-focused research to individuals and institutions around the world.

 

A significant portion of Smith Barney’s revenue is generated from fees earned by managing client assets as well as commissions earned as a broker for its clients in the purchase and sale of securities. Additionally, Smith Barney generates net interest revenue by financing customers’ securities transactions and other borrowing needs through security-based lending.  Smith Barney also receives commissions and other sales and service revenues through the sale of proprietary and third-party mutual funds. As part of Smith Barney, Global Equity Research produces equity research to serve both institutional and individual investor clients.  The majority of expenses for Global Equity Research are allocated to the Global Equities business within CIB and Smith Barney businesses.

 

Private Bank provides personalized wealth management services for high-net-worth clients in 33 countries and territories. With a global network of Private Bankers and Product Specialists, Private Bank leverages its extensive experience with clients’ needs and its access to Citigroup to provide clients with comprehensive investment management, investment finance and banking services. Investment management services include investment funds management and capital markets solutions, as well as trust, fiduciary and custody services. Investment finance provides standard and tailored credit services including real estate financing, commitments and letters of credit, while Banking includes services for deposit, checking and savings accounts, as well as cash management and other traditional banking services.

 

GLOBAL WEALTH MANAGEMENT

 

In millions of dollars

 

2004

 

2003

 

2002

 

Revenues, net of interest expense

 

$

8,511

 

$

7,840

 

$

7,566

 

Operating expenses

 

6,665

 

5,750

 

5,562

 

Provision for credit losses

 

(5

)

12

 

24

 

Income before taxes

 

1,851

 

2,078

 

1,980

 

Income taxes

 

652

 

735

 

698

 

Net income

 

$

1,199

 

$

1,343

 

$

1,282

 

 

 

 

 

 

 

 

 

Average risk capital (1)

 

$

1,877

 

$

1,866

 

 

 

Return on risk capital (1)

 

64

%

72

%

 

 

Return on invested capital (1)

 

52

%

70

%

 

 

 

(1)          See Footnote (7) to the table on page 3.

 

Global Wealth Management reported net income of $1.199 billion in 2004, a decrease of $144 million or 11% from 2003, reflecting a decline in Private Bank, partially offset by double-digit growth in Smith Barney.  Private Bank net income of $318 million in 2004 decreased $233 million or 42% compared to 2003, reflecting a $288 million decline in Japan mainly due to a $244 million after-tax charge associated with the closure of Private Bank operations in Japan, as well as a decline in transactional revenue.  Excluding Japan, Private Bank income grew $55 million or 12%, driven by growth in recurring fee-based and net interest revenues, a lower effective tax rate and improved credit costs, which were partially offset by higher incentive compensation costs.  Smith Barney net income of $881 million in 2004 increased $89 million or 11% compared to 2003, primarily driven by increases in asset-based revenue and transactional revenue, partially offset by increased marketing expenses, legal and compliance charges and continued investment in new client offerings.

 

Net income of $1.343 billion in 2003 increased $61 million or 5% from 2002, reflecting double-digit growth in Private Bank, partially offset by a decline in Smith Barney.  Private Bank net income of $551 million in 2003 increased $90 million or 20% from 2002, primarily due to increased investment management and capital markets activity combined with growth in lending revenues, partially offset by increased incentive compensation associated with the higher revenues.  Smith Barney net income of $792 million in 2003 decreased $29 million or 4% from 2002, primarily due to lower earnings on capital, a higher effective tax rate and increased legal, advertising and marketing costs.

 

The table below shows net income by region for Global Wealth Management:

 

EXCERPTS ON THIS PAGE:

10-Q
May 5, 2006
10-K
Feb 24, 2006
8-K
Jan 20, 2006
10-Q
Nov 4, 2005
8-K (3 sections)
Sep 9, 2005
10-Q
Aug 4, 2005
8-K (3 sections)
Jun 7, 2005

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