Citigroup CEO sees rising fees in investment banking, weaker markets revenue

By Tatiana Bautzer

NEW YORK (Reuters) – Citigroup expects investment banking fees to rise by a low-teens percentage in the first quarter versus the fourth quarter of 2023, CEO Jane Fraser told investors on Tuesday at a conference in New York.

Markets revenue is expected to drop 8% to 12% in the first quarter compared with a strong comparable quarter in 2023, she said.

Overall, Citi’s financial results are likely to be better than expected for the first quarter, she said.

The bank’s sweeping reorganization will be completed by the end of the month, Fraser said. That includes simplifying its structure into five businesses, eliminating some committees and reducing duplication in roles.

“It’s not rocket science,” Fraser said. “Stick to the plan, head down, and just relentlessly execute.”

Citi is working to address problems laid out by regulators in enforcement actions, called consent orders, that date back to October 2020.

It is focused on better data governance, improving risk and controls and automation, Fraser said.

“We are being bold,” Fraser said. “We’re being extremely disciplined in how we execute. It’s always a bumpy road, a transformation of this magnitude.”

U.S. regulators asked the bank for urgent changes to the way it measures default risk of its trading partners late last year, Reuters reported last month. And the bank’s own auditors found a plan to improve internal oversight to be lacking, according to an email seen by Reuters.

The regulatory setbacks could hinder Fraser’s sweeping overhaul as she tries to revive the company’s fortunes.

(Reporting by Tatiana Bautzer in New York, editing by Lananh Nguyen)