Citigroup’s global wealth management division suffered a $40 billion net outflow of client assets in the first quarter of 2009. The division also had a net loss of 2582 financial advisors over the past year.

The unit posted a 30% drop in total client assets to $894 billion in the quarter, compared to a year earlier. Its revenues declined 20% year-on-year to $2.6 billion.

In a statement the firm partially blamed the outflow of assets on financial advisors leaving the firm. However, they added that the advisors who left were mostly on the “lower end of the performance scale.” As OnWallStreet.com reported yesterday, Citigroup has ramped up its recruiting efforts in the last few weeks.

Despite the wealth management’s unit bad news, Citigroup’s overall results were positive. The banking giant earned a net profit of $1.6 billion, but posted a loss of 18 cents per share because of dividends it had to pay to preferred stock holders. The results beat analyst expectations.  
“Our results this quarter reflect the strength of Citi’s franchise and we are pleased with our performance. With revenues of nearly $25 billion and net income of $1.6 billion, we had our best overall quarter since the second quarter of 2007,” said Vikram Pandit, chief executive of Citi in a statement.

However, it was a different story over at Citi’s rival, UBS. At UBS’s annual general meeting on April 15, it reported that its US Wealth Management division brought in CHF 16 billion ($13.7 billion) in net new client assets in the first quarter.