Citigroup to boost Japan investment banking team on deal boom

CITIGROUP will further increase its investment banking team in Japan to capitalise on a record-breaking boom in mergers and acquisitions that it expects to reach new heights. 

The US bank plans to expand the division about 30 per cent by the first half of 2026, Japan vice-chair Masuo Fukuda said in an interview, declining to give a headcount figure.   

Japanese companies have become more open to deals following corporate governance reforms that have made executives and directors more attuned to shareholders’ needs.

Some firms are selling non-core assets while others are pursuing acquisitions to boost growth opportunities abroad. Hostile takeovers are no longer taboo, and private equity and activist investors are playing a greater role. 

“This is a major turning point for the Japanese market,” said Akira Kiyota, who joined Citigroup Global Markets Japan from Nomura Holdings in October as co-head of investment banking in Japan.

The increase in number and complexity of deals means “the need for financial advisers is growing, and our role will continue to expand,” he said. 

M&A deals involving Japanese companies are approaching US$350 billion this year, the most since Bloomberg began collecting the data in 1998. Citigroup ranked 10th among advisers on such transactions and 11th for underwriting Japanese equity and equity-linked deals.

Citigroup isn’t the only global firm that’s rushing to strengthen investment banking operations in Japan. Goldman Sachs revamped its M&A advisory operations this month. Jefferies Financial Group and UBS Group AG have also made key appointments. 

“The competition for talent is intensifying, requiring us to move fast with recruitment,” Fukuda said. In March, he said he wanted to grow the investment banking team by 15 per cent. The firm’s Japan securities unit has about 900 employees. 

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Citigroup’s Japan investment banking business is expected to post its highest annual revenue since the firm severed ties with local brand Nikko in 2009, according to the division’s other co-head, Taiji Nagasaka. 

When asked about the outlook for the Japanese market in 2026, Kiyota said external factors and various pressures mean that companies would “have no choice but to pursue corporate actions.” 

The Bank of Japan’s decision last week to raise benchmark interest rates to a 30-year high of 0.75 per cent is unlikely to slow deal activity, he added. BLOOMBERG