(Reuters) – Citigroup beat estimates for fourth-quarter profit, driven by strength in trading and dealmaking, and announced a $20 billion buyback program to cut a closely watched return target.

Shares of the third-largest U.S. lender were last up 5% in premarket trading on Wednesday after Citigroup said its board had approved a new share buyback program.

“2024 was a critical year and our results show that our strategy is working as intended, driving stronger performance across our businesses,” said Jane Fraser, CEO of Citi.

“While we now expect our 2026 ROTCE to be between 10% and 11% to drive additional investment in our businesses and transformation, this level is a waypoint, not a destination,” Fraser said. ROTCE is a measure of company performance.

Citi reported 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 ago.

Total revenue rose to $19.6 billion, compared to $17.4 billion a year ago.

Trading desks benefited from a banner year for U.S. stocks, with the S&P 500 hitting record highs in the fourth quarter.

Market revenue at Citi rose 36% to $4.6 billion in the quarter, with fixed income and equity markets rising 37% and 34%, respectively.

Wall Street dealmakers have also benefited from a revival in mergers, acquisitions and initial public offerings after a nearly three-year dry spell. Banks’ capital markets business experienced an upswing in the second half of 2024 as corporate customers 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 promised to implement more business-friendly policies.

Citi’s investment banking revenue rose 35% to $925 million in the fourth quarter.

Global investment banking revenue rose 26% to $86.8 billion in 2024, according to data from Dealogic. Citi had the fifth-highest fees of any bank during the same period.

Total bank revenues were $1.2 billion, up 27% year over year.

On an adjusted basis, Citi reported fourth-quarter profit of $1.34 per share, compared with analysts’ average estimate of $1.22, according to data compiled by LSEG.

The transition year ends

Citi shares rose 37% in 2024, outperforming the broader banking index and stock markets, as investors cheered CEO Jane Fraser’s efforts to transform the bank.

Fraser laid out a plan in late 2023 to boost profits, streamline operations and address long-standing deficiencies in the bank’s risk management and data management, and much of the restructuring was completed by last year.

The story continues