Citi defies investment banking trend in Asia

Despite weak earnings and declining bonuses at US banks, Citigroup’s CEO, Jane Fraser, is optimistic about the outlook for China. Fraser believes that there is an important recovery that will occur in Asia, citing China’s emergence from Covid lockdowns as the driving force behind a significant uptick in corporate finance activity.

Citigroup’s institutional clients division, which includes its treasury and cash management businesses as well as traditional investment banking, posted a 3% rise in revenues to $8.6 billion in the fourth quarter. This stands in contrast to other US banks that disclose their earnings in the Asia-Pacific region. Goldman Sachs’ APAC revenues fell 23% to $5.8 billion, while Morgan Stanley reported a 10% drop in revenues to $6.7 billion.

The poor performance of US banks in APAC has also been reflected in bonuses, with sources reporting that Citigroup pay was down by a third on average across APAC banking, while the decline was closer to 40% at Goldman Sachs.

Despite better performance, Morgan Stanley also saw a significant decline in compensation, with some areas of capital markets seeing a decrease of up to 50%. Both Morgan Stanley and Goldman Sachs have also cut staff in China as part of their annual headcount reduction. Goldman Sachs has also made additional redundancies as part of a group-wide move to reduce headcount by 6%.