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Citigroup (C) Q2 IB Fees to Surge 50% on Upbeat Capital Markets
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At recent investors day, Citigroup Inc. (C - Free Report) provided an outlook for investment banking (“IB”) fees. The bank forecasted a 50% increase in IB fees for the second quarter of 2024 on a year-over-year basis. The improved projections for merger advisory and debt and equity underwriting were the primary reasons behind this upbeat view.
Further, Citigroup expects market revenues to be ‘flat to down marginally.’ Also, net interest income, excluding market business, is expected to be "modestly down."
As per Bloomberg report, during an investor day, senior officials, including the CEO Jane Fraser, focused on the bank's most profitable business line, its services division, which assists governments and multinational corporations in managing their cash flows and risks internationally.
Management stated that in Mexico, Citigroup is moving ahead with its strategies for a listing of its Banamex subsidiary. The bank intends to launch an initial public offering for the business in 2025.
Citigroup considers 2024 as an ‘inflection year’ as it finalized its organizational simplification and expects to realize expense benefits from this. Management anticipates adjusted expenses in 2024 in the $53.5-$53.8 billion band, down from $56.4 billion in 2023.
Citigroup anticipates generating revenues in the range of $80-$81 billion in 2024, driven by fee growth in the Services segment and a rebound in the IB business.
The forecast follows strong and consistent growth for Citigroup, as evident from revenue CAGR of 20% between 2021-2023. Further, a strong capital and liquidity position is a favorable factor.
Year to date, shares of C have gained 20.3% compared with the industry’s rise of 14.7%.
Earlier this month, Troy Rohrbaugh, the co-CEO of JPMorgan’s (JPM - Free Report) Commercial & Investment Bank (“CIB”) segment, provided an updated outlook for the bank’s investment banking (“IB”) revenues. At the Morgan Stanley US Financials, Payments & CRE Conference, Rohrbaugh said that IB revenues are likely to increase 25-30% in the second quarter of this year, driven by robust capital markets performance.
The bank’s market revenues are expected to improve slightly more than the previously mentioned mid-single-digit growth.
Bank of America (BAC - Free Report) also provided an outlook for second-quarter IB revenues. Per the bank’s CEO, Brian Moynihan, IB revenues are expected to grow 10-15% year over year.
Moynihan also said that BAC’s trading revenues would grow at a low-single-digit percentage in the second quarter. Stable fixed-income revenues will partially offset robust equity market performance.
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Citigroup (C) Q2 IB Fees to Surge 50% on Upbeat Capital Markets
At recent investors day, Citigroup Inc. (C - Free Report) provided an outlook for investment banking (“IB”) fees. The bank forecasted a 50% increase in IB fees for the second quarter of 2024 on a year-over-year basis. The improved projections for merger advisory and debt and equity underwriting were the primary reasons behind this upbeat view.
Further, Citigroup expects market revenues to be ‘flat to down marginally.’ Also, net interest income, excluding market business, is expected to be "modestly down."
As per Bloomberg report, during an investor day, senior officials, including the CEO Jane Fraser, focused on the bank's most profitable business line, its services division, which assists governments and multinational corporations in managing their cash flows and risks internationally.
Management stated that in Mexico, Citigroup is moving ahead with its strategies for a listing of its Banamex subsidiary. The bank intends to launch an initial public offering for the business in 2025.
Citigroup considers 2024 as an ‘inflection year’ as it finalized its organizational simplification and expects to realize expense benefits from this. Management anticipates adjusted expenses in 2024 in the $53.5-$53.8 billion band, down from $56.4 billion in 2023.
Citigroup anticipates generating revenues in the range of $80-$81 billion in 2024, driven by fee growth in the Services segment and a rebound in the IB business.
The forecast follows strong and consistent growth for Citigroup, as evident from revenue CAGR of 20% between 2021-2023. Further, a strong capital and liquidity position is a favorable factor.
Year to date, shares of C have gained 20.3% compared with the industry’s rise of 14.7%.
Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IB Outlook Update by Other Banks
Earlier this month, Troy Rohrbaugh, the co-CEO of JPMorgan’s (JPM - Free Report) Commercial & Investment Bank (“CIB”) segment, provided an updated outlook for the bank’s investment banking (“IB”) revenues. At the Morgan Stanley US Financials, Payments & CRE Conference, Rohrbaugh said that IB revenues are likely to increase 25-30% in the second quarter of this year, driven by robust capital markets performance.
The bank’s market revenues are expected to improve slightly more than the previously mentioned mid-single-digit growth.
Bank of America (BAC - Free Report) also provided an outlook for second-quarter IB revenues. Per the bank’s CEO, Brian Moynihan, IB revenues are expected to grow 10-15% year over year.
Moynihan also said that BAC’s trading revenues would grow at a low-single-digit percentage in the second quarter. Stable fixed-income revenues will partially offset robust equity market performance.