In a January memo to employees, Citigroup CEO Jane Fraser urged bankers to move faster and aim higher as she pushed the firm beyond its yearslong revamp.
Now, the costly reality of hiring the dealmakers to realize that vision is showing up in the numbers.
Citi said operating expenses in its banking unit rose 20% to $1.2 billion in the first quarter, according to its earnings release published Tuesday, driven in part by higher compensation, headcount, and investments in the business. Still, fees were up, too: Overall revenues in the banking business of $1.8 billion grew 15% — largely driven by a 19% increase in investment banking fees, which reached $1.3 billion for the quarter.
The jump in costs reflects Citi’s aggressive spending to compete for a bigger share of Wall Street’s most lucrative deals. Under the leadership of Viswas Raghavan — Citi’s head of banking and executive vice chair, who joined from JPMorgan in 2024 — the firm has been luring senior dealmakers from rivals. Recent hires include Pankaj Goel from JPMorgan, who joined earlier this year to co-lead technology investment banking; Alex Watkins, who recently joined from JPMorgan as head of technology financing; and David Friedland, a former Goldman Sachs partner who joined last summer as co-head of North America investment banking.
“As Vis as the team look across the coverage map at some of the opportunities for us going forward, he’s making those investments, and we expect them to pay off over the next little bit of time,” Citi’s chief financial officer, Gonzalo Luchetti, said in a briefing with reporters Tuesday.
“There’s vintage curves in most investments — that’s true for talent and true in many other areas,” he added. “They take a little bit of time to mature and produce.”
A high-stakes bet on talent
Wall Street appears to be buying into Fraser’s vision.
Brian Mulberry, a strategist at Zacks Investment Management, previously told Business Insider that Citi is now on offense after years focused on fixing its business. That so many senior bankers have joined Citi underscores how seriously the industry is taking its turnaround, he added.
April data from Dealogic showed Citi has regained fourth place in both global and US M&A activity so far this year — up from fifth place in 2025. Still, it trails competitors including Goldman Sachs, JPMorgan, and Morgan Stanley.
“We continue to be proactive because this is an area where we want to drive our scale and continue to have this good momentum,” Luccheti said of the firm’s investments in hiring during the Tuesday call with reporters, adding that Citi had a “very active pipeline” in spite of the tensions created by the conflict in Iran.
Now, the stakes are high for Citi’s roster of new, more expensive recruits to prove their value.
“We are not graded on effort,” Fraser cautioned in her memo earlier this year. “We are judged on our results.”
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