Citigroup's Profit Surge: Trading Strength and Surging Deals Drive Success
Wednesday, Jan 15, 2025 8:15 am ET
5min read Citigroup, the multinational investment bank and financial services company, has reported a significant profit surge in the third quarter of 2024, driven by its trading strength and surging deal activity. The company's net income reached $3.2 billion, with earnings per share (EPS) of $1.51 and a return on tangible common equity (RoTCE) of 7%. This strong performance can be attributed to several key factors:
1. Fee-based revenues: Citigroup experienced double-digit growth in fee-based revenues, particularly in services and banking, which delivered a record quarter with revenues up by 8%. This increase in fee-based revenues contributed to the company's overall profitability.
2. Equities revenues: Equities revenues rose by 32% compared to the previous year, further boosting Citigroup's earnings.
3. Investment banking fees: Investment banking fees surged 44% due to investment-grade debt issuance and strong advisory performance. This significant increase in investment banking fees contributed to the company's overall profitability.
4. Wealth management: Wealth management revenues showed a 9% increase, driven by a 24% rise in client investment assets. This growth in wealth management contributed to Citigroup's earnings.
5. U.S. Personal Banking: U.S. Personal Banking revenues grew by 3%, with branded cards revenues increasing by 8%. This growth in consumer banking also contributed to the company's profitability.
These strong performances across various business segments, coupled with the company's ability to maintain its capital strength and return capital to shareholders, have significantly contributed to Citigroup's profitability.
The company's robust performance can be attributed to the favorable market conditions in 2025, which are expected to continue to drive deal activity. The EY-Parthenon Deal Barometer predicts an uptick in deals in the 2024 M&A outlook, with US corporate M&A deal volume increasing 20% and US private equity M&A deal volume up 16%. This rebound in deal volumes contributes to the overall increase in deal activity.
Citigroup's performance compares favorably to its competitors in the banking sector. In 2024 (Q4), Citigroup's EPS YoY Change was -1.31% (-0.44), while other major banks had positive EPS YoY Change:
* JPMorgan Chase & Co. (JPM): 12.33% (1.73 - 1.42)
* Bank of America Corp. (BAC): 19.63% (1.95 - 1.63)
* Wells Fargo & Co. (WFC): 11.31% (1.87 - 1.68)
* Goldman Sachs Group Inc. (GS): 19.65% (2.07 - 1.73)
Citigroup's performance was relatively weak compared to its competitors, but the company's strong trading strength and surging deals have driven its profitability. As the market conditions continue to improve, Citigroup is well-positioned to capitalize on the increased deal activity and maintain its strong performance.
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
