Citi is investing in platform and process simplification, security and infrastructure modernization, client experience enhancements and data improvements.

“We recognize these investments have driven a significant increase in expenses, but they are crucial to modernize the firm, address the consent orders and position Citi for success in the years to come,” Citi Chief Financial Officer Mark Mason said Friday during Citi’s first-quarter 2023 earnings call.

THE BIG PICTURE: The $2.4 trillion bank’s technology-related expenses increased 12% year over year, Mason said. Although expenses are up, the bank expects to see “benefits” in the investments over time.

For example, the bank is retiring 20 legacy platforms, investing in cloud, cyber and ledger capabilities in its security infrastructure and has launched next-generation, cloud-based instant payments capabilities to its Citi Treasury and Trade Services (TTS) eCommerce clients, according to the bank’s earnings presentation.

BY THE NUMBERS: Citi reported in Q1:

• Revenue increased 12% YoY to $21.4 billion;
• Citi TTS revenue increased 31% YoY to $3.4 billion;
• Technology and communication spend increased 6% YoY to $2.1 billion; and
• The bank added 8,000 people in technology roles.

NOTEWORTHY: The bank made leadership changes in Q1, Chief Executive Jane Fraser said during the call. Citi named Anand Selva its chief operating officer, taking over for Chief Administrative Officer Karen Peetz who will retire in May, Fraser said during the call. Selva, who has been with the bank for more than 30 years, will run Citi’s enterprisewide transformation program.

Citi also appointed Andy Sieg to serve as the bank’s new head of wealth management, Fraser said. He joins Citi from Merrill Lynch where he was the head of wealth management since 2017. “Andy is a widely respected leader in this space and comes to us after running an $18 billion business with $2.8 trillion in client balances.”

FLASHBACK: In Q1, Citi and Walmart teamed up to launch digital lending platform Bridge, according to a Citi release. The platform, first announced in February, connects the retail giant’s 10,000 U.S.-based small business suppliers with lenders to allow them to access a streamlined loan process and faster access to capital.

MARKET REACTION: Citi’s stock was up 0.26% to $49.69 at market close today, compared with $49.56 at market close Friday.

FUTURE LOOK: Citi is deploying CitiDirect Commercial Banking, a mobile and digital platform for commercial clients, Mason said, noting, clients “can open accounts and access all products and services across [Citi’s] Institutional Clients Group in the same way our large corporate clients do.”

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