Citi reports strong third quarter in institutional clients group despite fall in equities income

Solid fixed income revenues drove an increase in markets overall, while investment banking income spiked by 34% in Q3 2023 results.

Wall Street giant Citi has reported a strong quarter in its institutional clients group division, which covers markets, services and banking, as net income rose 12% year-on-year.

Markets saw a 10% increase, driven by a solid showing in fixed income according to Citi. Within that segment, revenues in fixed income saw a 14% uptick to $3.6 billion driven in large part by strong performance in rates and currencies.

Despite the $4.5 billion revenue in markets, a year-on-year improvement, equity revenues were down by 3%. According to Citi, this is down to a decline in equity derivatives which has in part been offset by growth in cash and prime. 

Read more – Citi reports double-digit Q2 decline in investment banking and markets revenue

Treasury and trade solutions posted its best quarter in a decade for Q3 2023 results, while services was the fastest growing business according to the results, increasing by 12%.

Elsewhere, investment banking was up 34% to $844 million year-on-year “driven by a few deals closing earlier than expected, as well as the absence of marks,” said the business. Overall, banking increased 17% – largely driven by this impressive performance in investment banking as well as “bolstered by a rebound in debt issuance and some signs of life in the equity capital markets”. 

Specifically, the investment banking performance came down to increased client activity in debt underwriting and the absence of certain realised and unrealised gain/(losses).

Throughout Q3 Citi has had some significant changes to its personnel. Back in August, chief executive of the institutional clients group at Citi, Paco Ybarra, announced plans to step down in the first half of 2024.

The following month, The TRADE revealed a number of cuts to it cash equities trading business in London, specifically that David Lackenby, an event driven sales trader based in London and Mark Brodie, a trader also specialising in event driven strategies, had both left. At the same time The TRADE learnt that Tracey Brown, a director and a high touch sales trader covering pan-European markets, had also departed. 

More recently this month, Jamie Mortimore was reportedly set to re-join Citi to lead the newly formed global rates algo trading team, according to an internal memo seen by The TRADE. Sam Hewson – previously global head of digital FX solutions and EMEA head of corporate sales and solutions (CSS) – was appointed global head of FX sales, effective immediately just two days later, The TRADE revealed.

Jane Fraser, chief executive of Citi, said: “Last month we announced consequential changes that align our organisational structure with our strategy and changes how we run the bank. When completed, we will have a simpler firm that can operate faster, better serve our clients and unlock value for our shareholders.”