⚠ Handing $80 Billion to BlackRockLow threat

Citigroup (C) — threat to the moat

Citi hands the management of $80 billion of its wealth clients' money to BlackRock, which is also one of its largest shareholders.

Citi decided some of its wealth product was better bought than made. In 2025 it appointed BlackRock as third-party manager for about $80 billion of Wealth clients' assets that Citi Investment Management used to run1. BlackRock and Vanguard each own more than 5% of Citi's shares2.

Wealth client balances, end-2025 ($bn)670Investment assets413Deposits204Loans80Moved to BlackRockCitigroup historical supplement; 2026 proxy statement
About an eighth of investment assets outsourced.

The deal saves Citi the cost of running portfolios and gives clients a well-known manager. It also means part of the investment fee goes to BlackRock, and the client sees BlackRock's name on the product.

Wealth ran at an efficiency ratio of 84% in 20253, so cutting costs mattered more than keeping every fee.

The outsourced portfolios are a meaningful slice. About $80 billion4 is roughly 12% of the $670 billion of Wealth investment assets at the end of 202556.

Citi has been selling the parts it does not want to run. The second quarter of 2025 included a gain of about $80 million on the sale of an alternative investments fund platform, and Citi sold its trust business in the third quarter of 2025, losing its fee revenue7. Wealth commissions and fees were $2,028 million in 2021 and $1,897 million in 20258.

What Citi keeps is the advice around the funds. Client investment assets grew 14% to $727 billion in the second quarter of 20269.

If Citi's own share of Wealth revenue from investments shrank while client assets grew, the franchise would be a distributor of other firms' products rather than a manager.

References
  1. ReportedIn 2025 it appointed BlackRock as third-party manager for about $80 billion of Wealth clients' assets that Citi Investment Management used to run.
    Citigroup 2026 proxy statement (DEF 14A) - chair and lead independent director, the BlackRock asset-management appointment, 5% holders and the 2025 share price. — April 2026 · publ. 2 April 2026 · source ↗
  2. ReportedBlackRock and Vanguard each own more than 5% of Citi's shares.
    Citigroup 2026 proxy statement (DEF 14A) - chair and lead independent director, the BlackRock asset-management appointment, 5% holders and the 2025 share price. — April 2026 · publ. 2 April 2026 · source ↗
  3. ReportedWealth ran at an efficiency ratio of 84% in 2025, so cutting costs mattered more than keeping every fee.
    Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
  4. ReportedAbout $80 billion is roughly 12% of the $670 billion of Wealth investment assets at the end of 2025.
    Citigroup 2026 proxy statement (DEF 14A) - chair and lead independent director, the BlackRock asset-management appointment, 5% holders and the 2025 share price. — April 2026 · publ. 2 April 2026 · source ↗
  5. ReportedAbout $80 billion is roughly 12% of the $670 billion of Wealth investment assets at the end of 2025.
    Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
  6. Moat Explorer calcAbout $80 billion is roughly 12% of the $670 billion of Wealth investment assets at the end of 2025.
    Moat Explorer calculation from Citigroup segment figures ($ millions unless stated; calendar years; segments as restated in the 8-K of 3 April 2026). Services: cross-border transaction value 416.4 / 279.5 - 1 = 49.0%, about half; U.S. dollar clearing 177.1 / 146.2 - 1 = 21.1%; fee revenue 6,385 / 4,967 - 1 = 28.5%, about 29%; net interest income 15,001 / 6,866 = 2.18 times, about 2.2; NII share 15,001 / 22,636 = 66.3%, about 66%; revenue 22,636 / 12,539 - 1 = 80.5%, about 81%; TTS 16,646 / 9,187 - 1 = 81.2%; Securities Services 5,990 / 3,352 - 1 = 78.7%, about 79%; Securities Services revenue over assets under custody 5,990 / 31,400,000 = 0.019%, about 1.9 hundredths of a percent; international share 15,729 / 22,636 = 69.5%, about 69%; share of Citi revenue 22,636 / 85,225 = 26.6%, about 27% (2025), 12,539 / 71,574 = 17.5%, about 18% (2021). Deposits: year-end 1,308,681 / 1,365,954 - 1 = -4.2%, about 4%. U.S. Consumer Cards: revenue 18,258 / 13,209 - 1 = 38.2%, about 38%; net interest income over average loans 20,169 / 170,000 = 11.9%, about 12 cents per dollar; Q2 2026 net credit losses over net interest income 1,850 / 5,180 = 35.7%, about 36%, more than a third; share of Citi revenue 18,258 / 85,225 = 21.4%, about 21%. Markets: rates and currencies 11,749 / 22,409 = 52.4%, about 52%; fixed income 16,745 / 22,409 = 74.7%, about 75%; international 14,020 / 22,409 = 62.6%, about 63%; revenue 18,888 / 20,401 - 1 = -7.4%, about 7%; net income 4,059 / 6,148 - 1 = -34.0%, about a third; revenue 22,409 / 19,108 - 1 = 17.3%, about 17%; share of Citi revenue 22,409 / 85,225 = 26.3%, about 26%. Allocated average TCE 2025 ($bn): Services 33.0 + Markets 53.5 + Banking 9.2 + Wealth 15.4 + U.S. Consumer Cards 20.3 + All Other 39.2 = 170.6; Markets 53.5 / 170.6 = 31.4%, about 31%; All Other 39.2 / 170.6 = 23.0%, about 23%, nearly a quarter. Banking: corporate lending and other 6,384 - 4,618 = 1,766, about $1,766 million; share of Citi revenue 6,384 / 85,225 = 7.5%. Wealth: Citigold and Retail Banking 7,666 / 11,272 = 68.0%, about 68%; Wealth at Work 930 / 11,272 = 8.3%, about 8%; revenue 11,272 / 9,871 - 1 = 14.2%, about 14%; 11,272 / 9,733 - 1 = 15.8%, about 16%; share of Citi revenue 11,272 / 85,225 = 13.2%, about 13%. All Other: revenue on the chart basis 4,442 managed + (176) reconciling items = 4,266 (2025); 9,491 - 670 = 8,821 (2021); 8,841 + 854 = 9,695 (2022); 9,389 + 1,346 = 10,735 (2023); 7,521 + 26 = 7,547 (2024); Corporate/Other 4,442 - 5,512 Legacy Franchises = -1,070, about minus $1,070 million. Further: All Other chart basis 4,266 / 8,821 = 0.48, about half; Banking 2025 income new basis 935 / old basis 2,324 = 0.40, so 60% less, about three-fifths; Mexico consumer and small business 6,500 / 4,539 - 1 = 43.2%, about 43%; U.S. card loans 170 / 409 consumer loans = 41.6%, about two-fifths; card loans excluding the American Airlines purchase (177 - 168 - 6.6) / 168 = 1.4%; Q1 2026 card net credit losses over net interest income 1,742 / 5,116 = 34.0%, about 34%; Q2 2026 equities over fixed income 2,301 / 4,706 = 0.49, about half; investment banking fees 4,618 / 2,713 - 1 = 70.2%, about 70%; Citigold (old basis) 4,953 / 3,803 - 1 = 30.2%, about 30%; net new investment assets first half 2026 15 + 16 = 31 billion; Wealth Q2 2026 efficiency 2,377 / 3,177 = 74.8%, about 75%; Securities Services 5,990 / 5,165 - 1 = 16.0%, about 16%. More: commercial card spend 71.2 / 38.6 - 1 = 84.5%, about 84%; advisory share of investment banking fees 1,908 / 4,618 = 41.3%, about 41%; advisory share of Q2 2026 investment banking revenue 390 / 1,548 = 25.2%, about 25%; BlackRock mandate 80 / 670 investment assets = 11.9%, roughly 12%; rewards and partner payments over interchange 12,075 / 9,718 = 1.24 times; new card accounts 5,376 / 2,942 - 1 = 82.7%, about 83%. Five-business income from continuing operations 2025: 8,187 + 6,265 + 935 + 1,178 + 3,409 = 19,974; Services 8,187 / 19,974 = 41.0%, about 41%, more than two-fifths. — FY2021-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Citigroup's recast historical supplement, Forms 10-K and 10-Q and its Q2 2026 earnings release; operands shown in the source line.
  7. ReportedThe second quarter of 2025 included a gain of about $80 million on the sale of an alternative investments fund platform, and Citi sold its trust business in the third quarter of 2025, losing its fee revenue.
    Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - Wealth and U.S. Consumer Cards results and key metrics. — Q2 2026 · publ. 14 July 2026 · source ↗
  8. ReportedWealth commissions and fees were $2,028 million in 2021 and $1,897 million in 2025.
    Citigroup Historical Quarterly Financial Data Supplement 2021-2025 recast to the first-quarter 2026 segments - Wealth and U.S. Consumer Cards: revenue by line, client balances, net new investment assets, branches, loans, credit losses and returns. — FY2021-FY2025 · publ. 3 April 2026 · source ↗
  9. ReportedClient investment assets grew 14% to $727 billion in the second quarter of 2026.
    Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - Wealth and U.S. Consumer Cards results and key metrics. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 28, 2026