Citi’s Asia Investment Banking Growth Plan 2026: Trends in Tech, Healthcare & Hybrid Finance

The coming year, as seen through Citi’s playbook, positions Asia not as an emerging afterthought but as a fulcrum of influence in global dealmaking. Cross-border M&A is expected to recover more firmly as corporates reposition supply chains and seek innovation access, with China and India anchoring much of the activity [1]. This aligns with broader regional themes where equity capital markets (ECM) have shown renewed vigor: Asia’s ECM deals rose to US$267 billion in 2025, up 15 percent from 2024, led by Hong Kong’s dominance at US$75 billion and India’s IPO segment [2].

Sector trends emphasise Healthcare, TMT, and AI as engines of financing demand. Equity issuances like IPOs, follow-ons, and convertibles, especially hybrid securities, are gaining traction. For example, Taiwanese convertibles and A-to-H share conversion tools are expected to gain more usage amid investor demand for flexibility [1]. Private credit is also positioned to complement public markets, providing tailored financing in high-yield or structure-oriented deals [1][3].

Citi is reweighting its operations to capture this momentum. In Japan, Citi reported a 140 percent year-over-year increase in investment banking fees (US$92 million by mid-2025) and is planning 10-15 percent growth in IB headcount there, reflecting a surge in cross-border M&A deals and policy shifts enhancing corporate governance and technology supply chains [4]. This scaling is mirrored in its recruitment of senior bankers and simplification of internal structures (e.g., fewer layers of management), to improve agility and win marquee mandates [3].

But the upside is not without risks. AI-related valuation bubbles are flagged as a concern: high valuations in tech and AI may face correction, which could slow IPOs or push pricing expectations down [2]. Macro risks include less predictable yields, potential for interest rate policy missteps, geopolitical friction (especially US-China and regulatory volt return), and regional vulnerabilities—Hong Kong’s real estate and sovereign or quasi-sovereign credit spread risk, for instance [5].

Strategically, investment banks will need to balance scale and selectivity: leaning into large transformative deals while maintaining diligence and structural leverage. Instruments such as convertibles and structured hybridity will be important bridges between debt and equity. Also critical will be the ability to provide end-to-end advisory in cross-border situations, particularly where GCC and Asian capital sources intertwine in infrastructure, energy, and financial service sectors [7][1].

Open questions for 2026 include: what degree and timing of US Federal Reserve tightening (or easing) will impact Asia-expose capital costs; to what extent AI valuation corrections will replay; how deeply GCC sovereign funds will commit to Asia in infrastructure and technology; and whether regulatory reforms (e.g. A-to-H conversion tools, convertible bond tax/treatment, capital market liberalization in China) deliver as expected.