HONG KONG (Reuters) -Citigroup plans to raise its investment banking headcount in Japan by 10% to 15% over the next year and make new hires in Australia, as part of its strategy to bolster growth in the Asia Pacific, its top regional banker said.

Rising interest in cross-border mergers and acquisitions (M&A) in Japan has resulted in Citi seeing a 140% rise in its investment banking fees in the country to $92 million as of July 10 compared to the same period last year, Dealogic data shows.

"We are hiring and strengthening our regional investment banking team in a very meaningful way," Jan Metzger, Citi's Asia Pacific head of investment banking, told Reuters.

"We're going to be in the market that's growing phenomenally and we're going to be growing faster than the market," Metzger said. The U.S.-headquartered bank did not disclose specific staff numbers for each market.

Japan's investment banking business, in particular, will "meaningfully grow" due to a shift in corporate governance, a regulatory nudge to corporates to improve market value, and strong supply of advanced hardware technologies, Metzger said.

In Japan, Citi exclusively advised Nippon Steel on its $14.9 billion acquisition of U.S. Steel last month.

"I think off the back of the Nippon Steel deal, our phones are really ringing off the hook with clients that have complicated geopolitical deals to do, both from Japan and elsewhere," Metzger said.

Citi has beefed up its investment banking team in Asia this year by recruiting senior bankers from rivals, including senior managing director Akira Kiyota from Nomura in Japan and former Goldman Sachs veteran Philippe Perzi in Australia.

On Tuesday, Citi reported a 13% rise in global investment banking fees in the second quarter.

DRIVING UP DEALS

Dealmaking in the U.S. and some markets stalled shortly after Trump unleashed hefty tariff hikes earlier this year, which weighed on economic growth. However, Metzger said he is seeing greater uncertainty driving up supply chain deals.

Japan is leading Asia's M&A rebound in 2025 with a record $232 billion worth of deals in the first half, and bankers expect the trend to sustain fuelled by take-private arrangements, outbound investments and private equity activity.

Meanwhile, as volume and number of international deals climb in Australia, global banks now have an edge over local boutiques in a highly competitive market, according to Metzger.

Having a "full banking offering" in the market helps Citi better compete with its advisory-focused competitors in Australia, he said.

Besides deals advisory, another regional focus for the bank is convertible bond issuances, which have leapt over the past year. The bank helped Alibaba raise HK$12 billion ($1.5 billion) via an exchangeable bond offering earlier this month.

Investors have flocked to convertible bonds from Chinese tech companies, viewing them as undervalued assets offering downside protection through the bond component to hedge geopolitical risks, Metzger said.