Citigroup expects its markets business to deliver mid-single-digit revenue growth, according to Chief Financial Officer Gonzalo Luchetti, signaling continued confidence in trading activity and institutional client demand as volatile financial markets create opportunities across equities, fixed income, currencies and commodities.
The outlook comes as Citi enters the final stretch of 2026 with its investment-banking and markets franchises benefiting from a more active environment for clients. Luchetti presented the outlook at a Barclays financial-services conference on Sept. 14, where investors were also focused on Citi’s broader profitability targets and efforts to improve returns.
The markets business has become an increasingly important component of Citi’s turnaround strategy. The bank operates its Markets division across fixed income, currencies and commodities as well as equities, giving it exposure to institutional trading flows generated by changes in interest rates, currencies, geopolitical conditions and corporate financing activity. Citi identifies Markets as one of its principal operating businesses alongside Banking and International, Services, Wealth and US Consumer Cards.
The current environment has been particularly supportive for trading businesses. Bond yields have climbed sharply, with the US 10-year Treasury yield briefly moving above 5% on Sept. 14 before settling around 4.96%. Expectations for further Federal Reserve tightening, elevated oil prices and geopolitical uncertainty have increased price swings across major asset classes, giving institutional investors more reasons to hedge portfolios and adjust positions.
That backdrop can benefit banks such as Citi because higher volatility tends to increase client trading activity. When investors reposition portfolios or corporations hedge interest-rate, currency and commodity exposures, banks can generate additional revenue through market-making and related services. The benefit is not guaranteed, however, because trading conditions can change rapidly and periods of extreme volatility can also increase risk.
Citi’s recent financial performance provides some support for the optimistic outlook. During the second quarter, the bank reported strong revenue growth and maintained guidance for 2026. Its net interest income excluding Markets was expected to increase 5% to 6% for the full year, with second-quarter growth reaching 6%. Management said the underlying businesses were continuing to show momentum, particularly in deposits and loans.
Markets itself has also been an important contributor to Citi’s net interest income. In the first quarter of 2026, Markets net interest income increased 45%, or about $900 million, from a year earlier, according to Citi’s regulatory filing. That increase helped drive overall net interest income higher even as the bank continued restructuring its business mix.
The latest outlook also reflects the broader recovery in Wall Street activity. Investment-banking pipelines have improved as companies return to acquisitions, equity issuance and debt markets after several years of elevated interest rates and economic uncertainty. Citi has been seeking to capture that recovery while controlling expenses and improving the efficiency of its global operations.
The bank’s strategy is part of a larger transformation led by Chief Executive Officer Jane Fraser. Citi has been simplifying its organizational structure, selling noncore businesses and investing in technology while attempting to raise returns on tangible common equity. At its 2026 investor day, the bank emphasized productivity improvements, technology investment and artificial intelligence as important tools for reducing costs.
For Citi’s markets franchise, technology investment is especially important because trading increasingly depends on electronic execution, automated pricing, data analysis and sophisticated risk-management systems. Greater automation can help the bank process larger volumes without proportionally increasing its workforce, although investment costs remain substantial.
The bank is also operating against a more complicated macroeconomic backdrop. Inflation remains elevated in several major economies, oil prices have risen above $100 a barrel amid Middle East tensions and central banks are reconsidering the path of interest rates. Citi itself has shifted its UK rate outlook, now expecting Bank of England increases later in 2026 and early 2027 as energy prices add to inflation pressure.
For markets businesses, such uncertainty can be a double-edged sword. Persistent volatility supports client activity, but sudden policy changes can also make risk management more difficult. Banks must balance the opportunity to capture trading revenue against capital requirements, credit exposure and potential market losses.
Citi’s mid-single-digit growth expectation therefore represents a measured outlook rather than a prediction of another extraordinary trading boom. The bank appears to be positioning its markets division for continued activity while relying on stronger investment banking, services and wealth businesses to broaden its revenue base.
Investors will ultimately judge the strategy by whether Citi can turn revenue growth into sustained improvements in profitability. The bank has spent years rebuilding its operations and strengthening controls, and stronger markets revenue gives management another source of earnings while those efforts continue.
With global rates, currencies and commodities facing unusually large swings, Citi’s institutional franchise is entering a potentially favorable period. If trading activity remains elevated and investment-banking volumes continue recovering, mid-single-digit markets growth could provide another important step in the bank’s broader effort to deliver more consistent returns.
