March 10 (Reuters) - Citigroup ( C ) expects growth in

the mid-teens percentage in investment banking fees and markets

revenue in the first quarter, CEO Jane Fraser said on Tuesday.

Shares of the company were up 1.2% in morning trading.

Strength in equities and fixed income is driving growth at

Citi's capital markets division, she said at the RBC conference,

adding that the mergers and acquisitions market remains

"vibrant" at a time of sustained investment in artificial

intelligence and automation.

Simmering geopolitical tensions have jolted global markets

in recent weeks, potentially benefiting trading desks at

investment banks, as periods of heightened volatility tend to

drive client activity.

Citi is in the midst of a sweeping turnaround plan under

Fraser designed to cut costs, fix regulatory problems and boost

profits to help the bank catch up with rivals.

Reuters reported in January that the bank was cutting about

1,000 jobs as part of a plan to downsize its workforce, with

more employees expected to be laid off this month.

Fraser said Citi will be front-loading some severance

expenses in the first quarter.

(Reporting by Utkarsh Shetti and Pritam Biswas in Bengaluru;

Editing by Shinjini Ganguli)