Key Takeaways
- Citigroup CFO Mark Mason forecasts that investment banking fees will rise by **mid-20% year-over-year** in the fourth quarter (Q4) of 2025, driven largely by momentum in mergers and acquisitions (M&A). [1][2]
- In contrast, Citigroup expects markets revenue for the same period to decline by **low-to-mid single digits** year-over-year. [1][2]
- The bank’s global economic outlook remains resilient, though Mason anticipates Q4 GDP growth has slowed and expects a **moderate slowdown into 2026**. [2]
- Citigroup is undergoing leadership changes: Mark Mason will transition out as CFO in **March 2026**, with Gonzalo Luchetti succeeding him. [3][2]
- Transformation initiatives are largely on track; around **two-thirds** are near completion or have reached target performance. [2]
- Citi is also watching regulatory developments closely, including potential reductions in capital requirements industry-wide, which Mason considers “directionally favorable.” [2]
Expanded Details & Supporting Data
Forecasts & Financial Drivers
At the Goldman Sachs U.S. Financial Services Conference, Mason stated: “On the investment banking side, we’re seeing continued momentum, particularly in M&A. We’re probably looking at investment banking fees up in the mid-20s (percentage) year-over-year.” [2] Meanwhile, he predicted that markets revenue would be down by low-to-mid single digits compared with a year earlier. [2]
Economic Context
Mason reported that while the global economy is holding up, growth is slowing. Specifically, he said Q4 GDP growth is expected to decelerate, with 2026 seeing continued but moderate slowing. [2] Incoming CFO Gonzalo Luchetti noted that U.S. consumers have remained resilient through October and November, with strong spending patterns helping buffer broader economic pressures. [2]
Leadership & Strategic Moves
Citigroup announced on November 20, 2025 that Mark Mason will transition out of the CFO role in early March 2026 and become Executive Vice Chair & Senior Advisor; Gonzalo Luchetti will assume the CFO position thereafter. [3] As part of this change, Citi is restructuring its U.S. retail operations: integrating Retail Banking and Citigold into the wealth business—led by Kate Luft—and combining Branded Cards & Retail Services into a standalone U.S. Consumer Cards unit under Pam Habner. [3]
Transformation & Regulatory Factors
Citi is executing a multi-year transformation under CEO Jane Fraser to streamline operations, improve efficiency, and strengthen compliance. Mason said approximately two-thirds of transformation efforts are at or near their target or completion state. [2] He also commented that regulatory conversations—particularly about capital rules—could lead to reduced capital requirements industry-wide, a tailwind if it materializes, though timing remains uncertain. [2]
Strategic Implications
- With investment banking fees expected to grow in the mid-20s %, Citi is well positioned to capture upside from strong M&A and capital markets activity—key revenue levers amid slowing macro growth.
- The anticipated drop in markets revenue suggests that trading and market-making businesses may face headwinds; costs could rise while revenues decline—emphasizing need for efficient capital and risk allocation.
- Leadership changes—with a new CFO and structural reorganization—could shift strategic priorities: focus may sharpen on more stable fee-generating businesses (investment banking, wealth management) rather than volatile markets exposure.
- Regulatory relief (if favorable) could significantly improve return on equity metrics for Citi and its peers; however, it hinges on regulatory timing and political execution.
- For investors, Citi’s performance in Q4 may serve as a litmus test for its transformation strategy under Jane Fraser, and whether it can consistently deliver improved profitability and return metrics amid macro uncertainties.
Open Questions & Risks
- How sustainable is this Q4 investment banking fee growth? Could deal pipeline strength decelerate in 2026?
- What will be the impact of declining markets revenue on Citi’s overall earnings, especially as transformations near completion and relative cost savings diminish?
- What specific regulatory reforms are most likely to lead to lower capital requirements, and on what timeline?
- How will the change in CFO—from Mason to Luchetti—affect execution, risk tolerance, and capital allocation? Will there be surprises in strategy shifts?
- How will slowing global GDP growth factor into deal making, especially cross-border transactions and capital markets issuance volumes?
- What are the potential credit or macro risks (e.g., interest rates, inflation, supply chain disruptions) that might undermine Citi’s optimistic projections?
Recent Related Developments & Comparative Context
- In Q3 2025, Citi had predicted that investment banking fees and markets revenue would both grow by mid-single digits year-over-year. [5]
- The dealmaking rebound is industry-wide: major banks including Goldman Sachs, JPMorgan, Morgan Stanley, and Bank of America also reported strong gains in advisory and investment banking revenue in Q3 2025. [6]
Sources
- “Citigroup CFO Mason expects investment banking fees to climb in fourth quarter,” Reuters, Dec 9, 2025. [1][2]
- “Citigroup expects to bring transformation expenses down next year … two-thirds … near completion … regulatory … capital requirements … incoming CFO comments,” Reuters via MarketScreener, Dec 9, 2025. [2]
- “Citi Announces CFO Transition Plans … Gonzalo Luchetti … Retail Banking … U.S. Consumer Cards … Kate Luft … Pam Habner … Mason transitions …” Citigroup press release, Nov 20, 2025. [3]
- “Citigroup CFO expects investment banking fees and market revenue to grow by mid-single digits in Q3,” Reuters, Sep 9, 2025. [5]
- “Wall Street banks’ blockbuster quarter gives dealmakers hope for a ‘golden age’ … Citi’s fees rose 17% to over $1.1b,” Business Insider, Oct 2025. [6]