World Stock Watch

Citigroup’s Profit Soars in Q4, Fueled by Trading and Deal-Making Strength

The fourth quarter of 2024 proved to be a remarkable turnaround for Citigroup, as the banking giant reported a significant profit, driven primarily by its robust trading performance and a resurgence in deal-making activities. This upswing in fortunes was largely attributed to the exceptional year in U.S. equities, with the S&P 500 reaching unprecedented heights during the same period.

Trading Desks Reap the Rewards

Citigroup’s trading desks capitalized on the favorable market conditions, resulting in a substantial 36% increase in markets revenue, which reached $4.6 billion in the quarter. This impressive growth was largely fueled by the strong performance of U.S. equities, which experienced a remarkable year.

Deal-Making Revival Boosts Investment Banking Fees

The banking industry’s deal-makers also benefited from a notable revival in mergers, acquisitions, and initial public offerings, following a nearly three-year-long lull. This resurgence in deal-making activities led to a significant increase in investment banking fees, providing a substantial boost to Citigroup’s bottom line.

Capital Markets Businesses Thrive

In the second half of 2024, corporate clients issued more debt and equity, resulting in a significant increase in capital markets businesses for banks. Industry experts anticipate that this momentum will continue into 2025, driven by the Federal Reserve’s decision to cut interest rates and the incoming administration’s pro-business policies.

Citigroup’s Financial Performance

The third-largest U.S. lender reported a net income of $2.9 billion, or $1.34 per share, for the three months ended December 31. This represents a significant improvement from the same period last year, when the bank reported a loss of $1.8 billion, or $1.16 per share.

Looking Ahead

As Citigroup navigates the current market landscape, industry experts are optimistic about the bank’s prospects, citing the potential for continued growth in trading and deal-making activities. With the Federal Reserve’s accommodative monetary policy and the incoming administration’s business-friendly stance, Citigroup is well-positioned to capitalize on these trends and drive further growth in the coming year.