Citigroup expects mid-teens percentage growth in its investment banking fees and markets revenue in the first quarter, Chief Executive Jane Fraser said on Tuesday. The outlook comes as the Wall Street lender reports strong activity in both divisions despite rising global tensions.
Speaking at a conference hosted by RBC, Fraser said corporate deal activity remains robust. Large capital mergers and acquisitions continue to move forward even as geopolitical risks increase.
“Despite everything, corporate activity is very strong at the moment. Large-cap M&A is not missing a beat right now,” Fraser said.
She added that strength in equities and fixed income trading is supporting growth in the bank’s capital markets business. Citi also sees sustained momentum in corporate investments linked to artificial intelligence and automation.
Shares of Citigroup rose nearly 3% in morning trading following the comments.
Strong Markets Despite Global Tensions
Fraser said trading desks at major banks often benefit during periods of volatility. Investors tend to rebalance portfolios and hedge risks when markets become uncertain.
However, geopolitical risks remain a concern. The conflict in the Middle East has intensified after the United States and Israel launched attacks on Iran more than a week ago. The situation has pushed up oil prices and raised concerns about inflation and supply chain disruptions.
Fraser said the overall economic impact will depend on how long the tensions continue and whether shipping disruptions occur near the Strait of Hormuz, a key global oil transit point.
A prolonged disruption of tanker traffic through the strait could push energy prices higher and complicate central banks’ efforts to manage global interest rates.
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Turnaround Efforts Continue
Citigroup is currently undergoing a broad restructuring under Fraser aimed at reducing costs, addressing regulatory issues, and improving profitability.
Earlier this year, the bank announced plans to cut around 1,000 jobs as part of a wider workforce reduction strategy. Fraser said some severance costs will be front-loaded in the first quarter, although the expenses are expected to be slightly lower than last year.
She also warned that isolated risks may emerge in the private credit market, particularly among lenders with weaker underwriting standards. However, Fraser stressed that the risks do not appear to be systemic.
Citigroup remains confident it will achieve its 10 to 11% return on tangible common equity target for the year.
