Citigroup Inc. is significantly expanding its investment banking team in Japan, targeting a 30% increase in staffing by the first half of 2026. This strategic move aims to capitalize on an unprecedented surge in mergers and acquisitions (M&A) activity in the Japanese market, which is approaching $350 billion in deal volume this year – the highest level since Bloomberg began tracking the data in 1998.

The expansion comes as Citigroup's Japan investment banking business is projected to achieve its highest annual revenue since the firm severed ties with its local brand Nikko in 2009. Masuo Fukuda, Citigroup's Japan vice-chair, confirmed the growth plans in an interview, noting that the increased scale will better position the bank to serve clients navigating Japan's rapidly evolving corporate landscape.

Market Transformation Drives Opportunity

Japanese companies have demonstrated remarkable transformation in their approach to strategic deals, largely driven by corporate governance reforms implemented in recent years. These changes have made executives and directors more responsive to shareholder value creation, resulting in increased openness to various transaction types.

The current deal boom encompasses multiple dimensions of corporate activity. Some firms are divesting non-core assets to streamline operations, while others are actively pursuing acquisitions to expand growth opportunities overseas. Notably, hostile takeovers – once considered taboo in Japanese business culture – are becoming more commonplace. Additionally, private equity firms and activist investors are playing increasingly influential roles in shaping Japan's corporate ecosystem.

"This is a major turning point for the Japanese market," said Akira Kiyota, who joined Citigroup Global Markets Japan from Nomura Holdings in October as co-head of investment banking in Japan. "The increase in number and complexity of deals means the need for financial advisers is growing, and our role will continue to expand."

Competitive Landscape Intensifies

Citigroup is not alone in recognizing Japan's growing importance in global investment banking. Several other major international financial institutions are simultaneously strengthening their operations in the country.

Goldman Sachs recently revamped its M&A advisory operations in Japan this month, while Jefferies Financial Group and UBS Group AG have made key appointments to enhance their local capabilities. This collective expansion has created a highly competitive environment for recruiting and retaining banking talent.

"The competition for talent is intensifying, requiring us to move fast with recruitment," Fukuda acknowledged. His March target of 15% team growth has been substantially increased to 30% in response to market developments. Citigroup's Japan securities unit currently employs approximately 900 professionals.

Performance and Positioning

According to industry rankings, Citigroup currently holds tenth position among advisers on Japanese M&A transactions and ranks eleventh for underwriting Japanese equity and equity-linked deals. The bank's expansion initiative represents a strategic push to improve these standings while capturing a larger share of the growing revenue pool.

The Japanese M&A market's record-breaking performance in 2025 reflects fundamental shifts in corporate strategy and investor expectations. As companies continue to adapt to new governance standards and global competitive pressures, the demand for sophisticated financial advisory services is expected to remain robust in the coming years.