Citi CFO Mark Mason says investment banking fees likely up 50%

CITIGROUP said it expects banking fees to surge 50 per cent in the second quarter compared with a year earlier on better prospects for merger advice and debt and equity underwriting.

By contrast, revenue from the markets business will be “flatish to down a bit”, chief financial officer Mark Mason said at the company’s investor day on Tuesday (Jun 18). Net interest income excluding the markets business will be “modestly down”, Mason said.

This month, Viswas Raghavan joined Citigroup from JPMorgan Chase to lead the banking franchise, which has lagged behind competitors. Mason said in a Bloomberg TV interview that the company is keenly focused on building that business, along with its wealth-management arm.

The forecast follows a strong first quarter for Citigroup, which posted higher revenue off gains from a more active capital-markets business. So far this year, its share price has climbed more than 18 per cent, compared with a 9 per cent increase for the S&P 500 Financials Index.

Citigroup is pitching a turnaround story to investors after years of returns that have lagged behind its rivals. Chief executive officer Jane Fraser is among senior executives who gave presentations on Tuesday at an investor day highlighting the bank’s most profitable business line, its services division, which helps multinationals and governments manage their risks and cash flows globally.

In Mexico, Citigroup is pressing ahead with its plans for a listing of its Banamex subsidiary in the wake of the recent election of a new president, Mason said. The bank plans an initial public offering for the business in 2025.

At JPMorgan Chase’s investor day last month, the company said it expects investment banking fees to show a percentage increase for the second quarter in the “mid-teens” compared with a year earlier. For the markets business, the increase will probably be in the “mid-single digits”, the company said. BLOOMBERG