Citigroup rides on Wall Street M&A boom

Citigroup Inc, following the trend with Wall Street peers, leveraged a boom in dealmaking to post a strong quarterly profit on Thursday, crossing out a weakness in its lending operations.

The management of the bank has said it expects the pressure on that arm of its business to persist.

A combination of multiple factors including low-interest rates and a booming stock market have helped firms within the U.S. raise billions of dollars in debt and equity funding.

This in turn benefitted investment banks as many of these firms used their advisory services in the deals towards which they applied their fresh capital.

This spike in dealmaking brought on a commensurate increase in investment banking fees to record-high levelsin the first nine months of 2021, with lenders like JPMorgan Chase, Citi, and Morgan Stanley as the biggestbeneficiaries.

“It was Citi’s best M&A quarter and the second-best investment banking quarter in a decade,” Chief Executive Jane Fraser said on a post-earnings conference call with analysts.

The lender’s investment banking revenue spiked 39% to US$1.9 billion, restoring balance to the dip caused by a 16% decline in fixed-income revenue a year earlier which was a season marked with unforeseen market volatility.