Citigroup Projects Higher Q4 IB Revenues: Fee Income to Benefit?

At the 2025 Goldman Sachs U.S. Financial Services Conference, Citigroup, Inc.’s C chief financial officer Mark Mason stated that the company’s investment banking (IB) fees are expected to jump in the fourth quarter of 2025 from the same time last year. 

Citigroup is seeing continued momentum, particularly in mergers and acquisitions (M&A). The company expects IB fees to increase in the mid-20s (percentage) year over year in the fourth quarter. Mason noted that the bank is seeing continued momentum in deal-making and capital markets activity, with mega deals and investment-grade activity contributing to fee growth. Despite the strength in IB fees, markets revenues are expected to be down in the low-to-mid single digits in the fourth quarter from a year ago.

Citigroup’s outlook builds on the strong performance seen in the third quarter of 2025, when investment banking revenues grew 23% year over year. Recent growth has been driven by active capital markets, a pickup in M&A, increased IPO issuance, and strong client engagement amid a volatile macroeconomic backdrop. Improving deal sentiment, heightened market volatility, and bullish institutional investor positioning have continued to channel flows into risk assets, supporting IB fee growth. As deal-making accelerates and capital markets remain active, Citigroup is positioned to generate higher advisory, underwriting, and transaction-related fees, supporting a sustained rise in fee income.

Additionally, Citigroup’s CEO Jane Fraser’s turnaround strategy focused on business simplification, cost discipline, and divesting non-core assets has improved operational efficiency and enabled the bank to reallocate capital and talent toward higher-growth, fee-rich businesses. Strategic hiring to strengthen IB teams in technology and high-growth regions, such as Asia, further enhances Citigroup’s ability to capture complex, high-value transactions. These initiatives are expected to reinforce Citigroup’s fee income momentum and improve the quality and durability of its revenue mix.

Where Do C’s Peers Stand in Terms of IB Revenues

Similar to Citigroup, other firms like JPMorgan JPM and Morgan Stanley MS are also witnessing a rise in IB revenues.

In the first nine months of 2025, JPMorgan’s IB fees rose 12.3% year over year to $7.3 billion, driven by improvements in advisory and underwriting businesses. Jeremy Barnum, executive VP and chief financial officer of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment. JPM expects IB fees to rise in the low single digits in the fourth quarter of 2025. 

Riding a wave of deal-making and initial public offering activity, Morgan Stanley's IB revenues reached $5.2 billion in the first nine months of 2025, up 15% year over year. On the third-quarter 2025 earnings call, Morgan Stanley CEO Ted Pick said the improving environment supported strategic M&As and renewed financing activity. While being cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen”, he noted that IB activity should continue to rise over the next couple of years.

Citigroup’s Price Performance & Zacks Rank

Shares of Citigroup have gained 63.3% in the past year compared with the industry’s growth of 38.7%.

C currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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