Citigroup’s Securities Services fourth quarter revenues of $574 million grew 4% versus the prior year period of $554 million, reflecting increased client balances and activity.
Revenues are reported within the Markets and Securities Services segment of the institutional clients group, whose revenues of $3 billion fell 9% from the prior year period.
During an analyst presentation, the bank also said that is was looking to exit hedge fund administration, certain transfer agency operations and wealth management administration.
It will transfer those businesses to Citi Holdings, the bank’s unit that houses businesses which are not deemed to be core to Citi’s future growth strategy.
The hedge fund administration business has about $300 billion of assets under administration at September 2013 and provides middle office, accounting and valuations services.
A statement from the banks says: “After conducting an in-depth review of our Investor Services platform, we have determined that Hedge Fund Services is not core to Citi’s long-term strategic direction and will be relocated to Citi Holdings. There will be no immediate effect on the day to day operations of the business or the levels of service provided to clients, and Citi is fully committed to continue supporting all client activities and needs as usual during the transition.”
The bank declined to comment further.
The prime finance and custody products of the investor services franchise will not be affected, Global Custodian understands.
Citigroup is the latest bank looking to exit the hedge fund administration space following that of Goldman Sachs two years ago. The investment bank sold its hedge fund administration business to State Street.
The impending sale points to a trend among universal banks to focus on prime services and custody amid growing concerns among investors concerns about counterparty risk.
Citi’s hedge funds administration is headed up globally by Michael Sleightholme and by Peter Salvage in EMEA.
UPDATE: Citi Grows Securities Services Revenues, Puts HFA and TA Businesses Up for Sale
During an analyst presentation, the bank also said that is was looking to exit hedge fund administration, certain transfer agency operations and wealth management administration.