Citigroup's M&A Fee Haul Surges 84% in Record Dealmaking Year
January 14, 2026 · by Fintool Agent
Citigroup-4.57%'s dealmakers are finally closing the gap on Wall Street rivals. The bank reported an 84% surge in financial advisory fees in the fourth quarter, capping a year in which revenue from handling mergers rose more than 50% to an all-time record.
The performance stands in stark contrast to larger rival JPMorgan Chase-1.08%, which saw investment banking fees fall 5% in the same quarter—up just 6% for the full year.
The Numbers
Citigroup-4.57% beat analyst expectations on both earnings and revenue:
| Metric | Q4 2025 Result | Consensus Estimate | vs. Estimate |
|---|---|---|---|
| Adjusted EPS | $1.81 | $1.67 | +8.4% |
| Adjusted Revenue | $21.0B | $20.72B | +1.4% |
| Total Revenue | $19.87B | - | +2.1% YoY |
However, reported net income fell 13% year-over-year to $2.47 billion ($1.19 per share), dragged down by a $1.1 billion after-tax charge related to the bank's planned exit from Russia.
Investment Banking Outperformance
The headline story is Citi's investment banking resurgence under CEO Jane Fraser:
| Business Line | Q4 2025 | YoY Change |
|---|---|---|
| Total Investment Banking Fees | $1.29B | +35% |
| Financial Advisory (M&A) | +84% | Record |
| Banking Segment Revenue | $2.2B | +78% |
Investment banking fees of $1.29 billion in Q4 compared to $951 million a year earlier. For the full year, Citi posted record M&A performance as global investment banking revenue rose 15% industry-wide to nearly $103 billion—the second-highest level after 2021.
"With record revenues and positive operating leverage for each of our five businesses, 2025 was a year of significant progress as we demonstrated that the investments we are making are driving strong top-line growth," said CEO Jane Fraser.
Ask Fintool AI AgentTrading and Net Interest Income
While investment banking surged, markets revenue was essentially flat:
| Segment | Q4 2025 | YoY Change |
|---|---|---|
| Total Markets Revenue | $4.54B | -1% |
| Fixed Income | Down | -1% |
| Equities | Down | -1% |
| Net Interest Income | Up | +14% |
| Prime Balances | Up | +50% |
The flat trading performance contrasts with peers: Bank of America-4.97% posted higher trading revenue on equity strength, while JPMorgan-1.08% saw equities trading surge 40%.
Net interest income—the bread-and-butter spread between what banks earn on loans and pay on deposits—rose 14% in the quarter, providing a solid foundation beneath the volatile capital markets businesses.
Russia Exit: A $1.2B Charge to Close a Chapter
The quarter's reported earnings were hit by a $1.2 billion pre-tax loss ($1.1 billion after-tax) related to Citi's long-awaited exit from Russia.
In late December, Citi's board approved the sale of AO Citibank—its remaining Russian operations—to Renaissance Capital, one of Russia's oldest investment banks. The deal is expected to close in the first half of 2026, finally ending a wind-down that began in 2022 after Vladimir Putin's invasion of Ukraine.
The loss is largely accounting-driven, tied to currency translation adjustments accumulated over years of ruble depreciation. Critically, Citi noted the divestiture will actually benefit its CET1 capital ratio through the deconsolidation of risk-weighted assets.
Fraser's Turnaround: Gaining Momentum
Today's results represent another milestone in Jane Fraser's multi-year transformation of the third-largest U.S. bank. Key achievements:
Six consecutive quarters of positive operating leverage across Citi and all five core businesses
Transformation progress: More than two-thirds of transformation programs are now at or near target state
Leadership continuity: Fraser was elected Chair of the Board in October 2025, receiving a one-time $25 million equity award reflecting the board's confidence in her execution
New CFO appointed: Gonzalo Luchetti will succeed Mark Mason in early March, bringing a track record of 12 consecutive quarters of positive operating leverage at U.S. Personal Banking
Continued restructuring: About 1,000 jobs are being cut this week as part of the restructuring announced two years ago to eliminate roughly 20,000 roles by the end of 2026
The bank's return on tangible common equity (ROTCE) was 5.1% in Q4—still well short of Fraser's 10-11% medium-term target. Excluding the Russia loss, ROTCE was 7.7%.
Ask Fintool AI AgentMarket Reaction
Shares of Citigroup-4.57% opened higher on the earnings beat but reversed to trade down about 2% by midday, changing hands around $114. The stock is up roughly 105% from its October 2022 lows and touched 52-week highs above $124 earlier this month.
| Bank | Q4 Earnings | Stock Reaction |
|---|---|---|
| Citigroup-4.57% | Beat | Down 2% |
| JPMorgan-1.08% | Beat (trading) | Down 3% |
| Bank of America-4.97% | Beat | Mixed |
| Wells Fargo-5.63% | Miss (NII) | Down 2% |
The broader bank selloff despite beats may reflect profit-taking after a strong run, with the KBW Bank Index near record highs.
What to Watch
M&A momentum sustainability: Analysts expect deal momentum to extend into 2026, helped by lower interest rates and a more accommodating regulatory backdrop. Citi's market share gains position it well if the pipeline holds.
Russia deal closing: The Renaissance Capital transaction must still receive regulatory approval and close in H1 2026. Currency movements could affect the final loss figure.
Continued restructuring: With 1,000 jobs being cut this week and more reductions planned through 2026, expense trends will be closely watched.
ROTCE progression: The gap between current returns (~7-8% adjusted) and Fraser's 10-11% target remains significant. 2026 guidance will be critical.
Goldman Sachs-1.14% and Morgan Stanley-1.87% report Thursday, completing the picture of how Wall Street fared in Q4.
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