If you’re an investment bank wondering whether you really need all the people you currently employ, you might want to take a long look at Citi. 

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In the three months to June 2024, Citi cut 8,000 people across the bank, but in the investment bank at least it seems to have done fine without them.

The cuts were part of Citi’s plan to remove 20,000 people by 2026. They didn’t all relate to its investment bank and markets businesses, but as we’ve reported, the investment bank and markets businesses were impacted. The removal of people doesn’t appear to have inhibited Citi’s ability to take advantage of resurgent activity.

Citi said today that its M&A revenues rose 72% year-on-year in the second quarter, while its debt capital markets (DCM) revenues were up 90%. Both exceeded the increase at JPMorgan. Only equity capital markets revenues at Citi lagged. 

Citi said today that its investment banking division gained market share in the second quarter. The implication, then, is that any staff let go after being deemed surplus to requirements were precisely that. Expenses across the banking division, which includes investment banking and corporate lending, fell 10% by virtue of “repositioning and other actions taken to right-size the expense base.” Year-on-year, headcount across Citi as a whole was down by 11,000 people.

While Citi’s markets division did less well than its investment bankers in Q2, this appears to have been the quarter in which the historic investment in its equities business paid off: revenues rose 37% versus JPMorgan’s 20% increase, providing some good news for the leadership of the equities business, which has been struck by repeated allegations of cultural impropriety, which Citi has denied. 

In fixed income sales and trading, Citi said revenues were weaker in macro (rates and FX) and up 20% in spread products. 

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