NEW YORK, June 10 (Reuters) - Citigroup's ( C/PN ) head of

banking Vis Raghavan said on Tuesday that performance in its

banking and trading divisions will improve this quarter despite

"anxiety" over U.S. tariffs.

Banking fees will increase by a mid-single digit percentage

in the second quarter versus the previous year, while markets

revenue will rise by a mid-to-high single digit percentage, he

told investors at a conference.

Dealmaking has stalled this year as President Donald

Trump's tariff and fiscal policies roiled markets, fueling

economic uncertainty. Still, bank executives have

expressed optimism

about a resurgence.

Citi's clients consider 10% tariffs as a "floor" and are

analyzing to absorb the cost of 10% to 20% tariffs on imports,

Raghavan said. The lack of clarity over the final tariff outcome

"froze" markets in April, but transaction volumes have improved

since then as the stock market bounced back.

"M&A continues to be super active -- there's a lot of

dialog, a lot of engagement," he said. "The debt market will be

more a function of how the M&A market manifests itself, through

acquisition financing."

Citigroup ( C/PN ) advised Mars on its

$35.9 billion acquisition

of Kellanova. The bank also

advised Charter Communications

in its $21.9 billion merger with Cox Communications.

Some IPOs have returned as stocks rose, particularly for

tech or digital asset firms companies that are less affected by

tariffs, he said.

"We had some recent deals that have done really well,

but generally the IPO market is kind of bit stagnant to the

extent that there is a manufacturing or a supply chain aspect to

it."

Raghavan, who joined from JPMorgan Chase a year ago, has

steered growth in Citi's banking division. Its revenue rose 12%

in the first quarter to $2 billion versus a year earlier.

The executive's compensation was $49.1 million in his first

year, including a $39 million stock award for equity that he had

forfeited from a previous employer which will be paid out over

time, according to a filing. Raghavan worked at JPMorgan for

more than two decades.

Citi CEO Jane Fraser hired Raghavan and Andy Sieg, who leads

its wealth division, to drive growth as she carried out a

sweeping turnaround. The revamp is aimed at boosting profits and

efficiency while meeting regulators' orders to fix widespread

problems in risk management and controls.