Citigroup Expects ~25% YoY Surge in Investment Banking Fees Despite Weak Markets

This outlook from Citigroup underscores a bifurcation in its revenue streams for Q4 2025: deal-related fees are expected to drive strong growth, while markets activities face headwinds. The anticipated mid-20s percent growth in investment banking fees suggests that mergers & acquisitions, debt and equity underwriting are notably buoyant—even in a dislocated macroeconomic environment. [1] The decline in markets revenue by low-to-mid single digits likely reflects waning volatility, tighter spreads, and perhaps a pullback in trading volumes compared to strong comps. [1]

Transformation efforts are materially advanced, signaling potential for improved efficiency and margin expansion ahead. The claim that two-thirds of transformation initiatives are “at or near completion” supports expectations of reduced costs and complexity, though progress will have to be sustained to be material. [1] The leadership transition from Mason to Luchetti, along with reorganizations—folding US retail into wealth, creating a standalone U.S. consumer cards business—will likely affect capital allocation and operating segments. [2]

Strategically, the anticipated strong investment banking performance gives Citigroup levers to rebuild revenues and market share in the corporate banking segment. However, pressure remains on risk management (compliance and regulatory consent orders) and the macro backdrop—slowing global growth, interest rate uncertainty—that could drag markets revenue or upset deal pipelines. [1] Also, regulatory capital requirements are under discussion and may shift favorably, but timing remains uncertain. [1]

Open questions include: How much of the projected fee growth is driven by a small number of megadeals vs. broad-based activity; how durable is the strength in investment‐grade issuance, IPOs, and equity volumes; what are the assumptions underpinning the markets revenue decline; and how smoothly the CFO transition and structural reorganization will occur without distracting from operational execution.