Jan 15 (Reuters) - Citigroup ( C/PN ) swung to a profit in

the fourth quarter, fueled by strength in trading and

dealmaking, and announced a $20 billion buyback program as it

cut a closely watched return target.

Shares of the third-largest U.S. lender were last up nearly

4% in premarket trading on Wednesday after Citigroup ( C/PN ) said its

board has authorized a new share repurchase program.

"2024 was a critical year and our results show our strategy

is delivering as intended and driving stronger performance in

our businesses," said Citi CEO Jane Fraser.

"While we now expect our 2026 ROTCE to be between 10% and

11% in order to make additional investments in our businesses

and transformation, this level is a waypoint, not a

destination," Fraser said.

Citi reported a net income of $2.9 billion, or $1.34 per

share, for the three months ended Dec. 31. That compares with a

loss of $1.8 billion, or $1.16 per share, a year earlier.

Total revenue rose to $19.6 billion, compared with $17.4

billion a year earlier.

Trading desks at the banks benefited from a banner year in

U.S. equities, with the S&P 500 touching record-high

levels in the fourth quarter.

Markets revenue at Citi jumped 36% to $4.6 billion.

Wall Street's dealmakers have also cashed in on a revival in

mergers, acquisitions and initial public offerings after an

almost three-year-long dry spell. Banks' capital markets

businesses got a boost in the second half of 2024 as corporate

clients issued more debt and equity.

Industry executives expect the momentum to continue this

year as the Federal Reserve cuts interest rates and

President-elect Donald Trump takes office. He has vowed to

implement more pro-business policies.

Citi's investment banking revenue jumped 35% to $925 million

in the fourth quarter.

Global investment banking revenue jumped 26% in 2024 to

$86.8 billion, according to data from Dealogic. Citi earned the

fifth-highest fees across banks, over the same period.

TRANSITION YEAR ENDS

Citi's stock surged 37% in 2024, outperforming the broader

banking index and the equity markets, as

investors cheered CEO Jane Fraser's efforts to transform the

bank.

Fraser laid out a plan in late 2023 to grow profits,

streamline operations and fix long-standing deficiencies in the

bank's risk management and data governance, and much of the

reorganization was carried out through last year.

Revenue in Citi's wealth management division, a key part of

Fraser's growth strategy, climbed 20% to $2 billion.

Investors are now assessing whether Fraser and her team can

meet growth targets and make progress on addressing regulatory

punishments imposed on the bank in the last few years.

In 2020, the Office of the Comptroller of the Currency and

the Federal Reserve fined Citi $400 million for some risk and

data failures. Last year in July, regulators fined Citi $136

million for insufficient progress in tackling those issues.

However, the bank received some relief when the Federal

Reserve in October terminated a 2013 enforcement action related

to its anti-money laundering programs.