Two of the largest US banks, Citigroup and Financial institution of America, notched better-than-expected earnings within the first three months of this yr as merchants raked in increased revenues amid President Donald Trump’s menace to begin a world commerce struggle.
The banks reaped the advantages of traders adjusting their portfolios after being spooked a few doable return to protectionist commerce insurance policies, following the same pattern at fellow Wall Road giants JPMorgan and Goldman Sachs.
President Trump had unveiled a string of ‘reciprocal’ tariffs on April 2, dubbed Liberation Day, to be slapped on imported items, solely to carry out a last-gasp U-turn final Wednesday as US authorities borrowing prices rose.
Citi mentioned its Q1 revenue rose 21% to $4.1 billion, or $1.96 per share, on increased income and decrease prices from the identical time final yr, whereas BoA rose from 11% to $7.4 billion from 2024.
Analysts surveyed by the London Inventory Change Group had forecast Citi’s $1.85 per share, whereas they predicted BofA earnings to quantity to 82 cents per share.
Citi’s equities merchants benefitted from “increased market volatility” and an uptick in consumer transactions, powering revenues to $1.5 billion over these previous three months and up 23% year-on-year.
The financial institution’s fixed-income merchants generated $4.5 billion in income, primarily in currencies and authorities bonds, an 8% enhance from the identical time in 2024.
BofA additionally noticed equities buying and selling income soar, rising by 17% to $2.2 billion, whereas fixed-income income rose 5% to $3.5 billion.
“Trading results were the star of the show,” mentioned Stephen Biggar, banking analyst at Argus Analysis, who warned executives that they could see additional a dip in dealmaking this yr.
Within the first three months of 2025, US M&A exercise fell 13%, in response to information from Dealogic, and Biggar mentioned that one other collapse “could doom a 2025 recovery if tariff turmoil is not resolved soon.”
Citigroup posted $1.1bn in funding banking charges in the course of the first three months of the yr, up by 14% in contrast with a yr earlier, whereas BofA mentioned funding banking charges stood at $1.5 billion, down 3% from the primary three months of 2024.
BofA CEO Brian Moynihan mentioned that the financial institution’s “business clients have been performing well and consumers have shown resilience.”
However in a thinly veiled reference to the continued menace of a world commerce struggle, the 65-year-old warned that People “potentially face a changing economy in the future.”
Fraser struck a extra optimistic be aware over Trump’s makes an attempt to restructure America’s commerce ties with dozens of nations.
“When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency,” she mentioned after Citi’s outcomes have been launched.
Final Friday, JPMorgan CEO Jamie Dimon informed traders that the US economic system would face “considerable turbulence” if Trump went forward along with his plan to slap tariffs on imported items.
