Citi grows investment banking after streamlining clients

Citigroup's annual results reveal strong performance in 2015.

Citigroup has announced a 6% increase in investment banking revenues last year as it also reported a significant rise in its net income.

Citigroup’s net income increased in 2015 to $17.2 billion on revenues of $76.4 billion, compared to net income of $7.3 billion on revenues of $77.2 billion in 2014.  Several fines and taxes hit Citigroup’s profit last year.

In a statement released today, Citigroup said: “Citigroup revenues were $76.1 billion in 2015, down 2% compared to the prior year. Citigroup full year 2014 results also included a charge of $3.8 billion ($3.7 billion after-tax) to settle RMBS and CDO-related claims and a tax charge of $210 million related to corporate tax reforms.”

Investment banking revenues were up 6% to $1.1 billion in Q4, which the firm attributed to streamlining its client relationships.

Citigroup’s fixed income markets showed revenues of $2.2 billion in the fourth quarter of 2015, up 7% year-on-year. Equity markets revenues of $606 million increased 29% due to improved performance in EMEA.

Michael Corbet, chief executive officer of Citigroup, said: “Overall, we had strong performance during 2015. The $17.1 billion we generated in net income was the highest since 2006, when our company was very different in terms of headcount, footprint, mix of businesses and assets.”

“Over the last three years, we have made substantial progress towards our targets and execution priorities… We have sharpened our focus on target clients, shedding over 20 consumer and institutional businesses in the process. Citi Holdings now consists of only 4% of our balance sheet and is profitable.”

By slashing operating expenses and net credit losses, Citigroup have revealed a profitable year. In particular, Citigroup’s legal expenses suffered a significant drop.

Earlier this week, JP Morgan’s financials for 2015 saw better than expected profits due in part to falling legal costs. It slashed non-interest expenses by 7.4% and legal expenses fell to $644 million from $1.1 billion.

Citigroup said: “Operating expenses in the fourth quarter 2015 included legal and related expenses of $411 million, compared to $2.9 billion in the prior year period”

“… net income was $17.1 billion in 2015, up 49% compared to 2014, as lower operating expenses and lower net credit losses were partially offset by the lower revenues and a lower net loan loss reserve release.”