- Citigroup CFO Mark Mason expects Q3 2025 investment banking fees and markets revenue to grow by mid-single digits year-over-year.
- Full-year revenue and expenses are likely to exceed prior guidance, but the stable expense-to-revenue ratio should keep the impact on earnings neutral to slightly positive.
- For Q4 2025, Citi projects investment banking fees up by the mid-20s percent while markets revenue declines by low-to-mid single digits.
- Citi continues its turnaround under CEO Jane Fraser with stock buybacks, simplification, non-core asset divestitures, and reports no signs of credit quality deterioration.
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Citigroup is signaling momentum in its investment banking and markets businesses, with a relatively conservative outlook for Q3 2025 and a far more aggressive projection for Q4 2025. In Q3, investment banking fees and market revenues are expected to grow in the mid-single digits year-over-year, reflecting improvement in deal flow, renewed capital markets activity, and broader macro stability. This suggests the firm is regaining strength after challenging prior quarters. [1][2][4]
For the full year, while Citi does expect to surpass its previous top-line (≈US$84 billion) and expense (≈US$54.3 billion) guidance, the unchanged expense-to-revenue ratio implies disciplined cost management, meaning increased spending is justified by proportional revenue gains—not a drift toward margin erosion. [1][2]
However, the Q4 outlook diverges sharply. With investment banking fees expected to rise by about 25% year-over-year, but markets revenue declining by low-to-mid single digits, the risk-reward profile changes. It implies that deal-making and advisory underwrite will be key growth drivers, while trading and underwriting income may face headwinds. This duality suggests potential sensitivities: rising interest rates, capital markets volatility, or regulatory uncertainties may dampen markets contributions. [3][4]
Strategically, Citi continues executing its turnaround: simplifying operations, shedding non-core assets (e.g. Banamex spin-out or listing), maintaining stock buybacks, and engaging with regulators on capital model changes. These actions align with optimizing return while positioning for a more favorable regulatory environment. However, open questions remain: What is the potential impairment risk in markets revenue? Will the strength in investment banking fees be sustainable given macro, geopolitical, or regulatory pressures? And how will shifts in credit quality or capital requirements impact Citi’s long-term margin structure?
Supporting Notes
- Citi CFO Mark Mason said at a New York conference that Q3 2025 investment banking fees and markets revenue are expected to grow by mid-single digits compared with a year earlier. [1][2]
- Full-year revenue guidance ($84B) and expenses guidance ($54.3B) may be exceeded, but Mason emphasized that the ratio between revenue and expenses is expected to remain stable, providing a neutral to positive impact on earnings. [1][2]
- In the fourth quarter of 2025, investment banking fees are anticipated to be up mid-20s percent year-over-year, driven by continued momentum in M&A, while market revenue is expected to decline by low-to-mid single digits. [3][4]
- Citi remains on track with stock buybacks (at least $4B announced earlier), continuing rollout of its turnaround plan under CEO Jane Fraser, including simplification and non-core asset divestitures. [1][2][3]
- No signs of credit quality deterioration according to CFO Mason. [1][2]
Sources
- [1] www.reuters.com (Reuters) — 2025-09-09
- [2] www.investing.com (Investing.com) — 2025-09-09
- [3] www.reuters.com (Reuters) — 2025-12-09
- [4] www.thestar.com.my (The Star (Malaysia)) — 2025-12-11
- [5] www.bloomberg.com (Bloomberg) — 2025-09-09