Citigroup (C.US) announced that due to the improved prospects of its mergers and acquisitions consultation, bond and stock underwriting business, it is expected that investment banking fee income in the second quarter will increase by 50% compared to the same period last year. In contrast, Citigroup's Chief Financial Officer, Mark Mason, stated at Tuesday's investor day that revenue from market business will remain "flat or slightly down." Mason also said that net interest income excluding market business will "slightly decline."
Viswas Raghavan, a senior executive of JPMorgan (JPM.US), recently joined Citigroup to be in charge of Citigroup's banking business. Citigroup's banking business has always lagged behind its competitors. Mason stated that Citigroup is very focused on building this business and its wealth management department.
Previously, Citigroup reported a strong performance in the first quarter, with increased revenue due to more active capital markets business. So far this year, its stock price has risen by more than 18%, while the S&P 500 financial index has risen by only 9%.
Citigroup is telling investors the story of its turnaround from loss to profit, after years of lagging behind its competitors in terms of return on investment. CEO Jane Fraser and other executives gave speeches at an investor day on Tuesday, focusing on the most profitable business unit of HSBC- the service department. The department helps multinational companies and governments manage their risks and cash flows globally.
In an interview, Mason stated that Citigroup is pushing forward with the IPO plan for its subsidiary Banamex after a new president was recently elected in Mexico. The bank plans to take the business public in 2025.
At JPMorgan's investor day last month, the company stated that it expects investment banking fee income in the second quarter to increase by about 15% compared to the same period last year. The company stated that the percentage increase in market business could be in the "mid-single digits."