Two of the largest banks in the United States, Citigroup and Bank of America, earned better than expected in the first three months of the year as President Donald Trump raised higher revenue amid the threat of launching a world trade war.
The banks enjoyed the benefits of investors adjusting their portfolios after being surprised at the possibility of a return to protectionist trade policy following a similar trend at Wall Street giants JPMorgan and Goldman Sachs.
President Trump announced a series of “mutual” tariffs called Rebate Day on April 2, only to perform the U-turn of the final gasp as U-turns rose last Wednesday, to slap imports.
Citi said first-quarter earnings rose 21% to $4.1 billion or $1.96 per share, due to increased revenue and reduced costs from the same period last year, with BoA rising from 11% to $7.4 billion from 2024.
Analysts surveyed by the London Stock Exchange Group had forecast Citi’s $1.85 per share, while BOFA’s revenues would be 82 cents per share.
Citi stock traders benefited from “increasing market volatility” and increased client transactions, increasing revenue to $1.5 billion over the past three months, up 23% year-on-year.
Fixed income traders at banks generated $4.5 billion in revenue, mainly in currency and government bonds, up 8% from the same period in 2024.
Bofa also saw a surge in stock trading revenues, rising 17% to $2.2 billion, and fixed income revenues rose 5% to $3.5 billion.
“The outcome of the transaction was a star of the show,” said Stephen Bigger, a bank analyst at Argus Research.
According to data from Dealogic, US M&A activity fell 13% in the first three months of 2025, with Biggar saying another collapse could “dedicate a 2025 recovery if tariff disruptions are not resolved soon.”
Citigroup recorded investment bank fees of $1.1 billion in the first three months of the year, up 14% compared to the previous year, while Bofa said investment bank fees were $1.5 billion, down 3% from the first three months of 2024.
Bofa CEO Brian Moynihan said the bank’s “business clients are working well and consumers are showing resilience.”
But in a thinly veiled reference to the ongoing threat of the World Trade War, the 65-year-old warned that Americans could “potentially face changes in the economy in the future.”
Fraser put on a more optimistic note about Trump’s attempts to restructure American trade ties with dozens of countries.
“When everything is said and done, and years of trade imbalances and other structural changes are behind us, the US remains the world’s leading economy and the dollar remains the reserve currency,” she said after City’s results were announced.
Last Friday, JPMorgan CEO Jamie Dimon told investors that if Trump proceeded with plans to slap tariffs on imported goods, the US economy would face “substantial turbulence.”
