Citigroup & JPMorgan Expect Q4 IB and Market Revenues to Rise

On Tuesday, at the Goldman Sachs 2024 U.S. Financial Services Conference, Citigroup, Inc. C and JPMorgan JPM unveiled their outlook for the fourth quarter of 2024 and full-year 2025.Citigroup’s OutlookRevenues: Citigroup’s chief financial officer, Mark Mason, anticipates that the bank will likely be able to reach the higher end of its revenue guidance of $80-81 billion for 2024. He mentioned that net interest income (NII), excluding markets, has surpassed expectations for this year. For 2024, the metric was projected to be slightly down year over year previously, while for the current quarter, it was expected to be flat sequentially. Further, investment banking (IB) fees are projected to be up 20-30% on a year-over-year basis in the fourth quarter of 2024 while markets revenues are expected to rise in the high-teen percentage. Mason said, “We continue to see good momentum in equities, particularly prime balances.”Share Repurchases: Mason stated that returning more capital to Citigroup’s investors is a high priority.The bank aims to complete $1 billion worth of repurchases this quarter, $500 million of which has been repurchased already.Other Guidance: The company expects positive operating leverage in 2025 and thereafter. Also, Citigroup’s cards business isn’t witnessing an unexpected level of delinquencies, though net credit losses for its retail division are expected to be at the higher end of the 5.75-6.25% range for 2024. Additionally, C reiterated adjusted non-interest expenses guidance at the higher end of the $53.5-$53.8 billion range.JPMorgan’s OutlookMarianne Lake, CEO of Consumer and Community Banking segment at JPMorgan, stated maintaining a cautiously optimistic scenario entering into 2025 with significant uncertainties. Revenues: JPMorgan expects IB fees to jump 45% in the fourth quarter of 2024 on a year-over-year basis. Likewise, markets revenues are likely to rise approximately 15%.Further, Lake noted that 2025 NII is likely to be $2 billion higher than previously estimated, driven by a higher interest rate outlook. Previously, management projected NII to trough by mid-2025 and to be roughly $87 billion by the year-end. Further, management expects 2024 NII to be roughly $92.5 billion, with nearly $22.9 billion in the fourth quarter of 2024.A solid recovery in the mortgage market is unlikely, Lake added.Expenses: JPM’s non-interest expenses for 2025 are anticipated to be $3 billion more than the estimate of $94 billion.  Management expects adjusted non-interest expenses to be approximately $91.5 billion in 2024, while in the fourth quarter of 2024, the metric is anticipated to be nearly $23 billion.Loans & Deposits: The company expects card loan growth in 2025, which would come down from the high teens, to trend near pre-pandemic levels. Overall, low single-digit loan growth is expected in credit cards. “U.S. consumer finances have been fairly resilient in recent quarters, and there are signs that holiday spending by consumers has strengthened,” Lake further mentioned.Further, management expects an uptick in leasing and a reasonable demand for auto loans in 2025.The company anticipates deposit growth in 2025 to be modest.JPM & C Zacks Rank & Price PerformanceOver the past six months, shares of JPM and C have rallied 26.8% and 20.8%, respectively, compared with the industry’s growth of 24.7%.Image Source: Zacks Investment ResearchCurrently, JPMorgan and Citigroup carry a Zacks Rank #3 (Hold) each.Investment Banking Stocks to ConsiderSome better-ranked investment banks are Raymond James Financial RJF and BGC Group, Inc. BGC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for RJF’s fiscal 2025 earnings has been revised roughly 1% upward over the past month. The company’s stock has risen 35.4% over the past six months.The Zacks Consensus Estimate for BGC’s 2024 earnings has remained unchanged over the past month. The company’s stock has risen 11.1% over the past six months.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. 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