Citigroup (C) and Bank of America (BAC) posted standout first-quarter results, spearheading a rally across the banking sector as market volatility underpinned record-breaking trading revenues.
Shares of BAC surged 4.30%, while Citigroup rose 4%, both outperforming peers including Goldman Sachs (GS +1.80%) and Morgan Stanley (MS +2%).
Citigroup’s trading operations delivered a 12% year-over-year revenue increase to $6 billion, with a 23% surge in equity markets revenue and 8% growth in fixed income. Bank of America’s performance was equally strong, with trading revenue up 9% to $5.66 billion — its highest in over a decade — and equity trading alone climbing 17% to a record $2.2 billion.
The gains were fueled by heightened client activity amid uncertainty tied to President Trump’s trade tariffs, which have injected renewed volatility into the markets. Altogether, the top five Wall Street banks raked in nearly $37 billion in trading revenue, reinforcing the sector’s resilience in turbulent conditions.
Banking Giants Outpace Expectations but Eye Economic Crosswinds
Bank of America delivered $27.4 billion in revenue and $0.90 earnings per share — both ahead of forecasts — marking its 12th straight quarter of year-over-year growth. Total profits climbed 11% to $7.4 billion, driven by strength in consumer banking and wealth management. Citigroup also exceeded analyst expectations with $21.6 billion in revenue and $4 billion in net income, buoyed by strength across its Markets and Wealth divisions.
Still, concerns about the macroeconomic backdrop loomed large in both banks’ outlooks. Bank of America set aside $1.48 billion in credit loss provisions, up more than 12% from a year ago, amid signs of rising charge-offs in its consumer banking arm. CEO Brian Moynihan struck a cautiously optimistic tone, emphasizing healthy consumer spending and business liquidity while acknowledging “a changing economy” ahead.
Citigroup, meanwhile, reaffirmed its full-year revenue guidance of $83.1–84.1 billion, despite ongoing investments in compliance and technology modernization. CFO Mark Mason noted the firm is ramping up automation in risk and compliance processes, with transformation spending expected to rise significantly from the $3 billion allocated last year.
Resilience Amid Tariff Tensions and a Softening Deal Environment
While trading revenues soared, investment banking told a more mixed story. Citigroup bucked the trend with a 13.6% year-over-year rise in banking fees to $1.1 billion, thanks to gains in both equity and debt underwriting. In contrast, Bank of America saw a 3% decline in investment banking revenue to $1.52 billion, reflecting a broader slowdown in deal activity across Wall Street.
Despite persistent inflation, elevated interest rates, and global trade tensions, bank leaders remained confident in the economic foundation. Moynihan told analysts that Bank of America does not foresee a recession in 2025, echoing Fed Chair Jerome Powell’s recent sentiment. He highlighted that “consumers keep pushing money into the economy” and that the bank's clients are “profitable, liquid, and have strong results.”
Citigroup CEO Jane Fraser also referenced trade disruptions but maintained that structural imbalances would eventually be resolved, with the U.S. retaining its economic dominance and the dollar’s reserve currency status intact.
As earnings season rolls on, major banks are flashing strength in core segments while staying cautious about the road ahead. For now, investors are rewarding results that show an ability to navigate volatility — with Citigroup and Bank of America leading the charge.
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