Citigroup Finishes 2003 as Top Underwriter

Wall Street bankers hope their revival of fortune in late 2003 will continue into 2004.

Citigroup Inc. was the world’s biggest stock and bond underwriter for the third straight year in 2003, market research firm Thomson Financial said Wednesday, as low interest rates fueled bond issuance and the powerful stock market rise spurred more companies to raise capital.

Wall Street’s underwriting volume rose 25% from last year to $5.33 trillion from $4.26 trillion, while fourth-quarter volume rose 26% from last year to $1.24 trillion from $981 billion.

“Uncertainty about the war in Iraq was removed, and global equity markets grew more confident,” said Quinten Stevens, J.P. Morgan Chase & Co.’s co-head of equity capital markets. “Continued economic strength and corporate profitability will drive issuance in 2004.”

Citigroup handled $542.7 billion of transactions in 2003, capturing a 10.2% market share.

For the year, Thomson said, Morgan Stanley finished second, followed by Merrill Lynch & Co., Lehman Bros. Inc., J.P. Morgan and Credit Suisse First Boston.

Merrill Lynch had placed second in 2002, followed by CSFB, J.P. Morgan, Morgan Stanley and Lehman Bros.

Citigroup also reported the most fees, capturing $1.76 billion in 2003 and $531 million for the fourth quarter.

Morgan Stanley and J.P. Morgan finished second and third for the year.

Industrywide, reported fees in 2003 edged 2% lower to $14.5 billion but in the fourth quarter rose to $4 billion, up 28% from a year earlier.

“Issuance is ramping up but hasn’t yet translated into bigger windfalls for banks,” said Richard Peterson, market strategist at Thomson. “We should see gains in 2004.”

Banks often use Thomson’s hotly contested rankings, known as “league tables,” as a marketing tool to win business.