Introduction
Citigroup's head of banking, Vis Raghavan, announced on June 10 that the company's banking and trading divisions are expected to improve this quarter despite ongoing concerns regarding U.S. tariffs.Context
Raghavan indicated that banking fees would rise by a mid-single digit percentage in the second quarter compared to the previous year, while markets revenue is projected to increase by a mid-to-high single digit percentage. This positive outlook comes amid a slowdown in deal-making attributed to regulatory uncertainties under President Trump's administration, leading to heightened economic anxiety.Developments
While deal-making has faced challenges this year, Raghavan noted a potential rebound as clients adapt to ongoing tariff discussions. Many clients are considering 10% tariffs as a "floor" and preparing for potential costs related to import tariffs ranging from 10% to 20%. After a period of hesitation in April, transaction volumes have started to recover alongside a rebound in stock markets."M&A continues to be super active—there's a lot of dialog and engagement," Raghavan mentioned. He highlighted that the debt market's performance would largely depend on the health of the M&A landscape, particularly in acquisition financing.
Citi has played a vital role in significant deals, such as advising Mars on its acquisition of Kellanova and navigating its own $21.9 billion merger with Cox Communications. Additionally, as stock prices have risen, some IPOs have emerged, especially from tech and digital asset companies that are less impacted by tariff regulations.
However, Raghavan acknowledged that the IPO market remains somewhat stagnant for those sectors tied closely to manufacturing or supply chains.
His leadership has driven growth in Citi's banking division, achieving a 12% revenue increase in the first quarter to $2 billion compared to the same period last year.