Executive Summary
Citigroup CFO Mark Mason expects investment banking fees in Q4 2025 to increase by approximately 25% year-over-year, driven by strong M&A activity; market revenues are projected to decline modestly compared to the same period. Meanwhile, the bank is underway with major transformation efforts, with around two-thirds of its cost-cutting and operational streamlining initiatives nearing completion. These dynamics reflect both near-term upside in dealmaking and broader pressures in markets and regulatory reform.
Analysis
In recent remarks at Goldman Sachs’ U.S. Financial Services Conference in early December 2025, Citigroup CFO Mark Mason provided updated guidance for the fourth quarter. Cementing a contrast with prior quarters—wherein investment banking revenues and fees had been growing more modestly—Mason now projects investment banking fees to be up in the mid-20s percentage year-over-year. This reflects accelerating momentum, particularly in mergers and acquisitions, and suggests a strong dealflow tailwind as the quarter closes [1][2].
The expected decline in markets revenue, by contrast, signals a divergence: while corporate advisory and underwriting are strengthening, trading and market-making environments face headwinds—perhaps from volatility, macro risks, or lower client activity in certain segments [1]. This bifurcation is consistent with what other major banks are reporting, with Goldman Sachs and Morgan Stanley also noting elevated M&A and underwriting pipelines entering 2026 [3][4].
Citigroup is balancing this promising deal pipeline with an ongoing restructuring. According to Mason, two-thirds of its transformation program—cost cuts, operational streamlining—are nearing completion [1]. This should improve efficiency and leverage. At the same time, the transition in CFO leadership, with Gonzalo Luchetti set to succeed Mason in March 2026, may bring continuity but also potential shifts in strategic execution [5].
Strategically, the strong investment banking outlook implies potential upside for Citi’s earnings in Q4 2025, especially if other cost elements are contained and capital markets remain stable. However, risks include: a possible reversal in markets revenues, regulatory changes (including capital and compliance rules), and broader macroeconomic or geopolitical shocks that could dampen dealmaking. Open questions remain around how durable the current M&A pipeline is, how Citigroup will manage expenses in the market-downside environment, and how the leadership transition might affect investor and client confidence.
Supporting Evidence
– Citigroup CFO Mark Mason said Q4 2025 investment banking fees are expected to be up in the mid-20s percent year-over-year, citing strong momentum, particularly in mergers and acquisitions [1].
– Market revenues are expected to decline in the low-to-mid single digits versus Q4 2024, despite the investment banking strength [1].
– Mason reported that about two-thirds of Citigroup’s transformation and cost-cutting initiatives are nearing completion as part of its strategic overhaul [1].
– The global economy remains “resilient,” though growth is anticipated to slow into 2026, per Mason’s remarks [1].
– Citigroup is undergoing a leadership transition: Gonzalo Luchetti will become CFO in March 2026, with restructuring such as folding U.S. retail into wealth management also underway [5].
Sources
- [1] www.reuters.com (Reuters) — Dec 9, 2025
- [2] www.investing.com (Investing.com) — Dec 2024
- [3] www.reuters.com (Reuters) — Dec 9, 2025
- [4] www.reuters.com (Reuters) — Dec 3, 2025
- [5] www.reuters.com (Reuters) — Nov 20, 2025