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Yahoo
a day ago
- Business
- Yahoo
C Projects Higher Q2 IB & Markets Revenues: Fee Income to Benefit?
Despite tariff-related headwinds, Citigroup C expects the performance of its Markets and Banking segments to improve in the second quarter of 2025. This was disclosed by Viswas Raghavan, head of Banking, at Morgan Stanley US Financials, Payments & CRE Conference on trading desks have been busy in the second quarter, with equities and fixed-income recording strong momentum. The bank projects markets revenues to grow in the mid-to-high single digits range on a year-over-year basis. Further, investment banking (IB) revenues are expected to increase by a mid-single-digit percentage. Raghavan noted that market activity came to a standstill in April due to ambiguity over the final tariff decision, but transaction volumes have since recovered alongside a stock market rebound. He added that merger & acquisition (M&A) activity remains strong with active deal discussions, and debt markets are expected to follow through with acquisition financing. Some IPOs, mainly in tech and digital assets, have returned, but the overall market remains sluggish, especially for tariff-affected Citigroup expects the cost of credit to be 'up a few hundred million' sequentially, driven by higher credit reserve build. As IB and markets revenues improve this quarter and optimism over deal-making activities continues, Citigroup is expected to witness a rise in fee income. The non-interest revenues constitute almost 33% of the company's total revenues. Citigroup is not the only one that is optimistic about the IB business prospects. At the same conference, Morgan Stanley MS CEO Ted Pick stated that deal-making and equity capital market activity are gaining momentum, with deal discussions remaining resilient and even accelerating in certain sectors. Further, Morgan Stanley is expected to end the second quarter on a solid note. Likewise, Moelis & Company's MC incoming CEO Navid Mahmoodzadegan told investors that the deal-making environment is rebounding, with confidence returning after a temporary pause in April due to U.S. tariff concerns. He further noted that Moelis & Company's deal pipeline is up from April and is as high as "it's ever been at the firm, or close to it.' Shares of Citigroup have gained 11.3% this year. Morgan Stanley has jumped 4.8% but Moelis & Company declined 21.5% in the same time frame. YTD Price Performance Image Source: Zacks Investment Research From a valuation standpoint, C trades at a forward price-to-earnings (P/E) ratio of 9.60, below the industry's average of 13.80X. Price-to-Earnings F12M Image Source: Zacks Investment Research The Zacks Consensus Estimate for C's 2025 and 2026 earnings implies a year-over-year rise of 23% and 25.9%, respectively. The estimates for 2025 and 2026 have been revised upward over the past 30 days. Estimate Revision Trend Image Source: Zacks Investment Research Citigroup currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Morgan Stanley (MS) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report Moelis & Company (MC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
a day ago
- Business
- Yahoo
How Will Dip in Q2 IB Revenues & Trading Surge Impact BAC's Fee Income?
At Morgan Stanley US Financials, Payments & CRE Conference on Wednesday, Bank of America BAC CEO Brian Moynihan warned of weakness in investment banking (IB) fees in the second quarter, while trading revenues are expected to show signs of expects IB fees to decline more than 20% year over year in the second quarter as tariff-related headwinds continue to hamper deal-making sentiments. In the first quarter, IB fees of $1.52 billion million declined 3% as the plunge in equity underwriting income was more than offset by higher advisory revenues and debt underwriting income. The Zacks Consensus Estimate for IB fees is pegged at $1.53 billion for the ongoing driven by heightened market volatility and a rise in client activity, Bank of America projects trading revenues to grow in the mid-to-high single-digit range in the quarter. This will mark the 13th consecutive quarter of year-over-year growth in sales and trading revenues for the company. Last quarter, BAC's sales and trading revenues (excluding net DVA) of $5.65 billion represented the highest number in a decade. The consensus estimate for sales and trading is pegged at $5.11 billion for second-quarter 2025, suggesting year-over-year growth of 9%. With sales and trading accounting for about 43% of Bank of America's fee income, ongoing momentum in this area should help offset pressure elsewhere. As such, the consensus estimate for non-interest income is $11.87 billion, implying a rise of 2% from the prior-year quarter. Like Bank of America, JPMorgan JPM anticipates markets revenues to grow in the mid-to-high single-digits range on a year-over-year basis for the second quarter. This is likely to be driven by a significant rise in market volatility and higher client activity. Additionally, JPMorgan's IB fees are expected to be down in the mid-teens C, on the other hand, projects second-quarter IB fees to increase by a mid-single-digit percentage on a year-over-year basis as deal-making activities rebounded and stock markets recovered from the ambiguity over the final tariff decision. Moreover, like BAC and JPMorgan, Citigroup's trading business is showing signs of strength. Citigroup projects markets revenues to grow in the mid-to-high single-digits range. Shares of Bank of America have risen 12.8% in the past three months. In the same time frame, JPMorgan soared 19.1%, and Citigroup was up 16.6%. Three-Month Price Performance Image Source: Zacks Investment Research From a valuation standpoint, Bank of America trades at a 12-month trailing price-to-tangible book (P/TB) of 1.69X, below the industry. P/TB Ratio Image Source: Zacks Investment Research Moreover, the Zacks Consensus Estimate for Bank of America's 2025 and 2026 earnings implies year-over-year growth of 12.2% and 15.3%, respectively. In the past month, earnings estimates for 2025 have moved marginally upward, while 2026 estimates have been revised slightly lower. Earnings Estimates Trend Image Source: Zacks Investment Research Bank of America currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
2 days ago
- Business
- Yahoo
Wells Fargo CFO says trading to be bigger driver of NII
Wells Fargo (WFC) CFO Mike Santomassimo, at the Morgan Stanley US Financials, Payments & CRE Conference 2025, says it is 'hard to get too excited' on loan growth changes. The CFO says the bank is not seeing any deterioration in the consumer portfolios and wouldn't expect too much commercial loan growth for the rest of the year. The executive adds that Wells is seeing a lot of green shoots in the deal business. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See Insiders' Hot Stocks on TipRanks >> Read More on WFC: Disclaimer & DisclosureReport an Issue Wells Fargo management to meet virtually with Truist Wells Fargo Predicts Double-Digit Upside for Shopify Stock Wells Fargo considering using balance sheet for direct lending, WSJ reports Senator Warren calls lifting Wells Fargo asset cap 'grave mistake' Trump says Fed 'must now' lower rates after ADP payrolls report: Morning Buzz
