Is Citi definitively not pursuing any acquisition, given press speculation?

Fraser was unequivocal that Citi is interested in nothing other than organic growth, reinforcing the message multiple times. “I wanted to be crystal clear, we are not interested in anything other than organic growth.”

What is the remaining 10% of the transformation and is there a last-mile problem?

Fraser said no challenges ahead; 90% of programs are at or near target state and in BAU. The remaining 10% is primarily data used in regulatory reporting. Completed work passes to independent audit for validation, then to regulators, who control the closure timeline. Transformation expense is declining, creating capacity for AI. “let's be very clear, they control the time line. So completing the work is just the beginning of the end.”

Initial estimate of the new Basel/G-SIB proposals' impact, and how the 60% full-year efficiency target reconciles with a 58% start.

Luchetti sees a moderate net benefit from the published proposals (retail/corporate credit RWA benefits offset by op-risk, CVA, market risk; G-SIB coefficient reverting to 2019 helps). On efficiency, he framed 60% around Q1 markets seasonality and continued targeted investments, with strong cost discipline plus structural efficiency over time. “Moderate benefit. Yes.”

Citigroup (C) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 14, 2026

Source: earnings call transcript

Executive summary

Citigroup Q1 FY26 — Broad-based momentum with four of five businesses growing revenue double digits

Citi enters 2026 with broad-based, diversified momentum as the transformation pivots from safety-and-soundness spend toward AI and organic growth, and management leaned hard on an organic-only, no-M&A stance ahead of a May Investor Day. The forward returns stance is deliberately conservative versus the Q1 print, framing seasonal capital-markets strength and an uncertain macro as reasons for restraint while it keeps investing.

Highlights

Net income of $5.8B, EPS of $3.06 and ROTCE of 13.1% on $24.6B of revenues (+14% YoY), with positive operating leverage firm-wide
Services revenue up 17% (best Q1 in a decade) at 27% ROTCE, with new client mandates up 40% and deposits up 16%
Markets crossed $7B of revenue for the first time in a decade (+19%), with equities up ~39% and prime balances up more than 50%
Banking revenue up 15% with a record first quarter in M&A (+19%) and ECM up 64%; advised on the 3 largest deals of the year (Paramount, McCormick, EQT/AES)
$6.3B of buybacks (highest quarterly level, near completion of the $20B plan), CET1 of 12.7%, TBV/share up 8% YoY, and efficiency ratio improved ~400bps to 58%

Concerns

Full-year ROTCE guidance of 10-11% sits well below the 13.1% Q1 print, with management citing Q1 seasonal strength and macro uncertainty
Cost of credit of $2.8B including a firm-wide net ACL build of $597M on a downside-skewed macro scenario (8-quarter weighted unemployment ~5.4%, downside ~7%)
Wealth ROTCE still only 10.8% and DCM fees down 6% amid lower non-investment-grade activity
~$500M of severance taken and Middle East conflict/inflation flagged as risks to growth and potential deal deferrals in H2
Transformation still ~10% incomplete (data used in regulatory reporting) with the consent order outstanding and regulators controlling the closure timeline

Guidance & targets

Category	Target	Timeline	Confidence
Full-year NII (ex-markets)	up approximately 5% to 6% high materiality	FY26	High
Full-year efficiency ratio	around 60% high materiality	FY26	High
Full-year ROTCE	10% to 11% high materiality	FY26	High
Total U.S. credit card net credit loss (NCL) rate	between 4% and 4.5% high materiality	FY26	High
Loan growth (ex-markets)	around mid-single-digit growth medium materiality	FY26	Medium
Deposit growth (ex-markets)	around mid-single-digit growth medium materiality	FY26	Medium
CET1 ratio target	around 12.6% (~110 bps above the 11.6% requirement, incl. 100 bps management buffer) high materiality	FY26	High
Disallowed DTA reduction	reduce this year in excess of $800M medium materiality	FY26	Medium
NIR (ex-markets) growth	growth driven by momentum in services, banking and wealth low materiality	FY26	Medium
New capital regime impact (Basel III Endgame / G-SIB reproposal)	overall net benefit to Citi; moderate net benefit on what has been published, with additional benefit from the stress capital buffer medium materiality	Pending final rule	Low
Banamex divestiture — remaining 24% sell-down	close in the coming months (reaching 49% divested) medium materiality	coming months (2026) · FY26	Medium
Banamex deconsolidation and IPO timing	no additional stake sales in 2026; deconsolidation in early 2027, IPO after when conditions permit medium materiality	early 2027	Medium
Poland consumer business divestiture	on track to close the sale this summer low materiality	Summer 2026 · FY26	Medium
Share repurchases outlook	well positioned to return capital; detail on future repurchase expectations to be provided at Investor Day high materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Services (TTS + Security Services) Growth driven by deepening with existing clients, new client acquisition and product innovation across e-commerce and fintech; BlackRock ~$4T Security Services win cited; leadership in tokenization and real-time payments. Net interest income: +18% YoYNoninterest revenue: +15% YoYNew client mandates: +40%Cross-border transaction value: +12% YoYAssets under custody and administration: +21% YoYAverage deposits: +16% YoYAverage loans: +14% YoYExpenses: +14% YoYFees as % of revenue: over 30%	up 17% YoY (best Q1 in a decade)	+17%	—	Net income $2.2B; ROTCE 27%; positive operating leverage
Markets (Fixed Income + Equities) Best quarter in over a decade; strong momentum across corporates, asset managers, hedge funds and banks; equities driven by derivatives, prime services and cash. Fixed income revenue: +13% YoYRates and currencies: +6% YoYSpread products and other fixed income: +27% YoY (commodities strength)Equity revenue: +39% YoYPrime balances: +50%Average loans: +27% YoYExpenses: +11% YoY	over $7B (first time in a decade); revenue up 19% YoY	+19%	—	Net income $2.6B; ROTCE 18.7%; positive operating leverage
Banking (Investment Banking + Corporate Lending) Record first quarter in M&A with strong sponsor performance; advised on the three largest deals of the year (Paramount, McCormick, EQT/AES); DCM down on lower non-investment-grade activity but share maintained vs year-end 2025. Investment banking fees: +12% YoYM&A: +19% YoY (strongest Q1 in a decade)ECM: +64% YoYDCM: -6% YoYCorporate lending revenue ex loan-hedge marks: -3% YoYExpenses: +20% YoY	up 15% YoY	+15%	—	Net income $304M; ROTCE 15.8%; cost of credit $132M (net ACL build $126M)
Wealth (Citigold/Retail Banking, Private Bank, Wealth at Work) Now includes U.S. retail banking; growth partly offset by decline in Wealth at Work and sale of the trust business; deposits shifting toward higher-yielding investments including on Citi's platform. Net interest income: +14% YoYNoninterest revenue: +5% YoYInvestment fee revenue: +11% YoYNet new investment asset flows: ~$15B in quarter (~$43B LTM, ~7% organic growth)Client investment assets: +14% YoYCitigold and Retail Banking revenue: +13% YoYAverage loans: +6% YoYAverage deposits: +4% YoYExpenses: +1% YoY	up 11% YoY (8th straight quarter of growth)	+11%	—	Net income $432M; ROTCE 10.8%; pretax margin 18%; positive operating leverage
U.S. Consumer Cards (General Purpose + Private Label) Newly split into general-purpose vs private-label reporting to align with strategy; general-purpose growth offset by private-label declines; ACL build reflects seasonal mix, the Barclays/American Airlines forward purchase commitment and macro uncertainty. Net interest income: +3% YoYNoninterest revenue: +14% YoY (lower partner payment accruals, higher annual fees)General purpose card acquisitions: +12%Spend volume: +5-6%Average loans: +4% YoYNet credit losses: $1.7B (-11% YoY)Net ACL build: $350MExpenses: +1% YoY	up 4% YoY	+4%	—	Net income $732M; ROTCE 19.2%; cost of credit $2.1B; positive operating leverage
All Other (managed basis: Corporate/Other + legacy franchises) Legacy-franchise growth (Mexico consumer) offset by wind-down markets and Corporate/Other NII decline from actions to reduce Citi's asset sensitivity in a lower-rate environment. Mexico consumer: growth incl. Mexican peso appreciation and a gain on sale of an investmentCorporate/Other: NII decline from reduced asset sensitivity, partially offset by higher NIRExpenses: -4% YoY	up 15% YoY	+15%	—	Cost of credit $400M (net credit losses $371M, driven by Mexico loans)

C operating KPIs by quarter

C operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Sep 2026 Q3 FY26	Change vs prior quarter
Common equity tier 1 ratio (CET1)	13.6% We grew our tangible book value per share by 4% and ended 2024 with a CET1 ratio of 13.6%, approximately 150 bps above our regulatory capital requirement. Source: earnings call transcript	13.4% We ended the quarter with a CET1 ratio of 13.4% and our tangible book value per share crossed $90. Source: earnings call transcript	13.2% We ended the quarter at a common equity Tier 1 capital ratio of 13.2%, over 100 bps above our regulatory requirement at quarter end. Source: earnings call transcript	13.2% We ended the quarter with a preliminary 13.2% standardized CET1 capital ratio, approximately 160 basis points above our 11.6% regulatory capital requirement, which reflects a 3.6% stress capital buffer. Source: earnings call transcript	12.7% We ended the quarter with a CET1 ratio of 12.7%, which is 110 basis points above our regulatory capital requirement, and our tangible book value grew by 8% from a year ago. Source: earnings call transcript	12.8% Our CET1 ratio stood at 12.8% and remains about 120 basis points above our current regulatory minimum. Source: earnings call transcript	12.8% Our tangible book value per share rose 6% to $101.9 and our CET1 ratio stood at 12.8%. Source: earnings call transcript	0 pt
Return on tangible common equity (ROTCE)	6.1% This quarter, we reported net income of $2.9 billion, EPS of $1.34 and an RoTCE of 6.1% on $19.6 billion of revenues, generating positive operating leverage for the firm and in each of our businesses. Source: earnings call transcript	9.1% This morning, we reported net income of $4.1 billion and earnings per share of $1.96 with an ROTCE of 9.1%. Source: earnings call transcript	—	—	13.1% This morning, we reported net income of $5.8 billion for the first quarter with an EPS of $3.06 and an ROTCE of 13.1%. Source: earnings call transcript	13% This morning, we reported net income of $5.8 billion for the second quarter with an EPS of $3.15 and an RoTCE of 13%. Source: earnings call transcript	11.5% This morning, we reported net income of $5.2 billion for the third quarter with an EPS of $2.85 and an RoTCE of 11.5%. Source: earnings call transcript	-1.5 pt
Return on tangible common equity (ROTCE) Services	—	26.2% Services generated positive operating leverage for the third consecutive quarter and delivered net income of $1.6 billion and continued to deliver a high ROTCE of 26.2%. Source: earnings call transcript	28.9% Services generated positive operating leverage for the fifth consecutive quarter and delivered net income of $1.8 billion, with an ROTCE of 28.9% in the quarter and 26.1% year-to-date. Source: earnings call transcript	36.1% Services delivered net income of $2.2 billion, with an RoTCE of 36.1% in the quarter and 28.6% for the full year. Source: earnings call transcript	27% Services generated positive operating leverage and delivered net income of $2.2 billion with an RoTCE of 27%. Source: earnings call transcript	30.9% Services generated positive operating leverage and delivered net income of $2.6 billion with an RoTCE of 30.9% in the quarter and 29% year-to-date. Source: earnings call transcript	31.2% Average deposits increased 16% primarily driven by growth in the US Services generated positive operating leverage, net income of $2.6 billion and an RoTCE of 31.2% in the quarter and 29.7% year-to-date. Source: earnings call transcript	+0.3 pt
Return on tangible common equity (ROTCE) Markets	7.4% Markets generated another quarter of positive operating leverage and delivered net income of $1 billion and $4.9 billion for the year and delivered an RoTCE of 7.4% and 9.1% for the year. Source: earnings call transcript	14.3% Markets generated positive operating leverage for the fourth consecutive quarter and delivered net income of $1.8 billion and an ROTCE of 14.3%. Source: earnings call transcript	12.3% Markets generated positive operating leverage for the sixth consecutive quarter and delivered net income of $1.6 billion with an ROTCE of 12.3% in the quarter and 13.5% year-to-date. Source: earnings call transcript	6.2% Markets delivered net income of $783 million with an RoTCE of 6.2% in the quarter and 11.6% for the full year. Source: earnings call transcript	18.7% Markets generated positive operating leverage and delivered net income of $2.6 billion with an RoTCE of 18.7%. Source: earnings call transcript	17% Markets generated positive operating leverage and delivered net income of $2.4 billion with an RoTCE of 17% in the quarter and 17.8% year-to-date. Source: earnings call transcript	12.3% Markets delivered net income of $1.7 billion an RoTCE of 12.3% in the quarter and 15.9% year-to-date. Source: earnings call transcript	-4.7 pt
Return on tangible common equity (ROTCE) Banking	6.5% Banking generated positive operating leverage for the fourth quarter in a row and delivered net income of $356 million and $1.5 billion for the year and delivered an RoTCE of 6.5% and 7% for the year. Source: earnings call transcript	10.7% Banking generated positive operating leverage for the fifth consecutive quarter and delivered net income of $543 million and an ROTCE of 10.7%. Source: earnings call transcript	12.3% Banking generated positive operating leverage for the seventh consecutive quarter and delivered net income of $638 million with an ROTCE of 12.3% in the quarter and 10.7% year-to-date. Source: earnings call transcript	13.2% Banking generated positive operating leverage for the 8th consecutive quarter and delivered net income of $685 million with an RoTCE of 13.2% in the quarter and 11.3% for the full year. Source: earnings call transcript	15.8% Banking delivered net income of $304 million with an RoTCE of 15.8%. Source: earnings call transcript	18% Banking generated positive operating leverage and delivered net income of $350 million with an RoTCE of 18% in the quarter and 16.9% year-to-date. Source: earnings call transcript	19.2% Banking delivered net income of $378 million, an RoTCE of 19.2% in the quarter and 17.7% year-to-date. Source: earnings call transcript	+1.2 pt
Net new assets Wealth	—	—	—	$7.2B Net new investment asset flows slowed to $7.2 billion in the quarter, consistent with typical seasonality and we continued to see growth in client investment assets which were up 14% including the impact of market valuations with net new investment assets for the full year representing approximately 8% organic growth. Source: earnings call transcript	~$15B Net new investment asset flows were approximately $15 billion in the quarter, contributing to approximately $43 billion in the last 12 months, representing approximately 7% organic growth. Source: earnings call transcript	$15.7B Net new investment asset flows were $15.7 billion in the quarter, contributing to over $56 billion in the last 12 months, representing 9% organic growth. Source: earnings call transcript	$38B We brought in $38 billion in net new investment assets this quarter, up over 100% from a year ago. Source: earnings call transcript	+142%
Return on tangible common equity (ROTCE) Wealth	10.1% Wealth generated a pretax margin of 21% and another quarter of positive operating leverage, delivering net income of $334 million and $1 billion for the year and delivered an RoTCE of 10.1% and 7.6% for the year. Source: earnings call transcript	9.4% Wealth had a pretax margin of 17% and generated positive operating leverage for the fourth consecutive quarter and delivered net income of $284 million and an ROTCE of 9.4%. Source: earnings call transcript	12.1% Wealth had a pretax margin of 22%, generated positive operating leverage for the sixth consecutive quarter and delivered net income of $374 million, with an ROTCE of 12.1% in the quarter and 12.5% year-to-date. Source: earnings call transcript	10.9% Wealth had a pretax margin of 21%, generated positive operating leverage for the 7th consecutive quarter and delivered net income of $338 million with an RoTCE of 10.9% in the quarter and 12.1% for the full year. Source: earnings call transcript	10.8% Wealth had a pretax margin of 18%, generated positive operating leverage and delivered net income of $432 million with an ROTCE of 10.8%. Source: earnings call transcript	14.4% Wealth had a pretax margin of 23%, generated positive operating leverage and delivered net income of $583 million with an RoTCE of 14.4% in the quarter and 12.6% year-to-date. Source: earnings call transcript	14.3% Wealth had a pretax margin of 22%, generated positive operating leverage, net income of $585 million and an RoTCE of 14.3% in the quarter and 13.2% year-to-date. Source: earnings call transcript	-0.1 pt
Return on tangible common equity (ROTCE) US Personal Banking	6.2% USPB generated another quarter of positive operating leverage and delivered net income of $392 million and $1.4 billion for the year, and delivered an RoTCE of 6.2% and 5.5% for the year. Source: earnings call transcript	12.9% USPB generated positive operating leverage for the tenth consecutive quarter and delivered net income of $745 million and an ROTCE of 12.9%. Source: earnings call transcript	14.5% USPB generated positive operating leverage for the 12th consecutive quarter and delivered net income of $858 million with an ROTCE of 14.5% in the quarter and 12.9% year-to-date. Source: earnings call transcript	14.3% USPB generated positive operating leverage for the 13th consecutive quarter and delivered net income of $845 million with an RoTCE of 14.3% in the quarter and 13.2% for the full year. Source: earnings call transcript	—	—	—	-0.2 pt
Employees	—	—	—	226K I want to thank Jane, my colleagues and all 226,000 employees for the privilege of serving as your CFO over the last 7 years. Source: earnings call transcript	—	219K The benefits of our past investments and productivity efforts have allowed us to gain efficiencies across our expense base and reduce our headcount to 219,000 with over $800 million of severance incurred year-to-date. Source: earnings call transcript	—	—
Efficiency ratio	—	—	—	—	58% Expenses of $14.3 billion were up 7% with an efficiency ratio of 58%, which I'll provide details on shortly. Source: earnings call transcript	—	58.5% Expenses of $14 billion were down 2% on a reported basis with an efficiency ratio of 58.5%. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Citi Token Services	milestone	invested for many years; ongoing
Firm-wide AI-at-scale strategy (agentic AI)	roadmap	detail to be laid out at May 2026 Investor Day

Deals & partnerships

BlackRock customer contract (Security Services / middle-office + ETF servicing) ~$4 trillion (assets serviced, per analyst)

Described by management as the most notable Security Services win but 'far from the only'; the $4T figure was cited by the analyst and not independently re-quantified by management.

Russia operations (buyer not named) divestiture released ~$4B of capital

Citi completed its exit from Russia in February 2026, mid-quarter.

Banamex (several prominent investors) divestiture (additional 24% sell-down)

Follows a 25% sell-down in Q4 2025; no further stake sales anticipated in 2026 ahead of deconsolidation in early 2027; IPO to follow when conditions and regulatory requirements permit.

Poland consumer business (buyer not named) divestiture

Management on track to close the sale of the consumer business in Poland this summer.

Barclays (American Airlines co-branded card portfolio) customer contract (forward purchase commitment)

Forward purchase commitment for the Barclays American Airlines co-branded card portfolio coming in the second quarter.

Trust business (buyer not named) divestiture

Sale of the Wealth trust business referenced as a drag on NIR and client investment assets in the quarter.

Risks & headwinds

Macro/geopolitical uncertainty — Middle East conflict and inflation Ongoing; second/third-order impacts grow the longer the conflict persists

Explicitly unquantified; management notes Asia and Europe hit harder by energy shocks than the U.S. and Brazil; inflation seen as a greater risk to growth, biasing central banks toward more restrictive policy

Mitigation:Intentionally resilient, diversified strategy; high-quality loan portfolios; disciplined risk management; greater North American resiliency; active client engagement on supply-chain rerouting, hedging and liquidity

Credit / macro downside embedded in reserves Ongoing; ACL a function of macro environment and business volumes

Firm-wide net ACL build of $597M; cost of credit $2.8B; reserves skewed to downside using 8-quarter weighted-average unemployment of ~5.4% (downside scenario ~7%); total reserves ~$22B (2.6% of funded loans; 8% in U.S. cards)

Mitigation:Prime-weighted card portfolio (~85% FICO 660+); U.S. card NCLs down 11%; disciplined risk-appetite framework

Capital-markets / deal-flow cyclicality Second half of FY26

DCM fees down 6%; risk of M&A deferrals into H2 if conflict is protracted; sponsors more cautious; high-yield DCM and IPO markets more selective

Mitigation:Strong M&A pipeline anchored by resilient global multinationals; continued talent/C-suite investment; flight-to-quality supporting high-grade activity

Regulatory / transformation and consent-order overhang Multi-quarter; regulators control the validation and closure timeline

~10% of transformation programs incomplete (primarily data used in regulatory reporting); consent order still outstanding

Mitigation:90% of programs at/near target state and in BAU; independent audit validation before regulator assessment; declining transformation spend

Private credit / NBFI exposure Ongoing

$22B corporate private credit, 100% securitized, 98% investment grade; part of broader nonbank-financial-institution lending disclosure; NCLs/NALs low and stable

Mitigation:Ample subordination, collateral, fraud controls, third-party verification (not reliant on attestations/warranties), rigorous client selection and constant stress-testing

Capital-regime uncertainty (Basel III Endgame / G-SIB / SCB) Until rules are finalized; active in the comment period

Latest NPR 'an improvement but not yet where it should be'; management sees a moderate net benefit but did not quantify; G-SIB still 'gold plated' vs Basel standard; material duplication between NPR and current SCB for operational/market/CVA risk; SCB does not reflect Citi's simplified risk profile

Mitigation:Advocacy in the comment period alongside other bank CEOs; 100 bps management buffer maintained (CET1 12.7%, ~110 bps above the 11.6% requirement)

Private-label credit card structural pressure Multi-year secular trend (predates BNPL)

Explicitly unquantified; private-label share of U.S. card loans has declined markedly (was ~33% of U.S. card loans in Q1 2024 on an old basis) as borrowing preferences shift

Mitigation:Pivot toward general-purpose and co-brand (e.g., Costco); disciplined exit of low-scale portfolios without a path to improved returns

Corporate/Other NII pressure from reduced asset sensitivity Ongoing in a lower-rate environment

Explicitly unquantified; lower benefit from cash and securities reinvestment drove the Corporate/Other NII decline

Mitigation:Actions taken to reduce asset sensitivity to a roughly neutral USD position; investment securities reinvesting at higher rates as the portfolio rolls off; structurally asset-sensitive non-USD book diversified across 65+ currencies

Q&A highlights

Color on the BlackRock $4T servicing win and what the market may be underappreciating in Services growth, including tokenization as opportunity vs. threat.

Fraser attributed exceptional Services performance to executing the 2-year-old strategy — deepening with clients, new acquisition and product innovation (mandates +40%, high retention, strong win rates). Citi leads in tokenization and real-time payments and views BlackRock as the most notable but far from only Security Services win; fees remain over 30% of revenue.

“There is always a flight to quality when there are things going on in the world and we are quality.”

asked by Glenn Schorr · answered by Jane Fraser

3 min read 7 chapters

Detailed narrative

Firm-wide results and operating leverage

Citigroup reported Q1 FY26 net income of $5.8B, EPS of $3.06 and ROTCE of 13.1% on $24.6B of revenues, up 14% YoY, generating positive operating leverage for the firm and the majority of its five businesses. NII ex-markets rose 7%, noninterest revenue ex-markets rose 29%, and total markets revenue rose 19%.

Expenses of $14.3B increased 7% (4% ex-severance), producing an efficiency ratio of 58% — a ~400bps improvement. Four of the five core businesses grew revenue double digits.

Services — the 'crown jewel' quarter

Services delivered its best first quarter in a decade with revenue up 17%, NII up 18% and NIR up 15%, driving $2.2B of net income at a 27% ROTCE. New client mandates were up 40%, cross-border transaction value up 12%, and assets under custody and administration up 21% (including a BlackRock ~$4T middle-office/ETF servicing win).

Average deposits rose 16% and average loans 14% (export agency finance, working capital). Management cited digital-asset/tokenization leadership and real-time payments with global e-commerce clients as durable growth drivers, with fees consistently over 30% of revenue.

Markets — best quarter in over a decade

Markets revenue rose 19% to cross $7B for the first time in a decade, producing $2.6B net income at an 18.7% ROTCE. Fixed income was up 13% (rates & currencies +6% on FX/volumes; spread products & other fixed income +27% on commodities strength) and equities up 39% on derivatives, prime services and cash, with prime balances up more than 50%.

Average loans rose 27% on spread-product financing. Expenses rose 11% on performance-related comp, volume and legal.

Banking — record Q1 M&A

Banking revenue rose 15% on investment banking and corporate lending, with $304M net income at a 15.8% ROTCE. IB fees rose 12%: M&A up 19% (strongest first quarter in a decade, strong sponsor performance), ECM up 64% on follow-ons and convertibles, offset by DCM down 6% on lower non-investment-grade activity.

Citi advised on the three largest deals of the year (Paramount, McCormick, EQT/AES). Corporate lending revenue ex loan-hedge marks fell 3%; expenses rose 20% on performance comp and investments. The M&A pipeline remains strong though sponsors are more cautious and high-yield/IPO activity is selective toward quality.

Wealth and U.S. Consumer Cards

Wealth revenue rose 11% (eighth straight quarter of growth) with $432M net income, a 10.8% ROTCE and an 18% pretax margin; NII rose 14%, investment fee revenue 11%, and net new investment asset flows were ~$15B (~$43B LTM, ~7% organic), lifting client investment assets 14%.

Citigold and Retail Banking (now within Wealth) rose 13%. U.S. Consumer Cards revenue rose 4% (NII +3%, NIR +14%) for $732M net income and a 19.2% ROTCE; general-purpose card acquisitions rose 12% and spend 6%, with the segment newly split into general-purpose vs. private-label reporting.

Card NCLs of $1.7B fell 11%.

Capital, credit reserves and balance sheet

Citi ended Q1 with a 12.7% CET1 ratio, ~110bps above its 11.6% requirement (including a 100bps management buffer), total assets of $2.8T (+5% QoQ), a $1.4T deposit base (+3%), a 114% average LCR and over $1T of available liquidity; TBV/share grew 8% YoY.

Cost of credit was $2.8B, including a firm-wide net ACL build of $597M on a downside-skewed scenario using an 8-quarter weighted-average unemployment rate of ~5.4% (downside ~7%). Total reserves were ~$22B (2.6% of funded loans; 8% in U.S. cards). Corporate exposure is 78% investment grade, and disclosed corporate private credit of $22B is 100% securitized and 98% investment grade.

Transformation, AI and strategy

Management reported 90% of transformation programs at or near target state, with remaining work primarily in data used for regulatory reporting; completed work moves to independent audit and then regulators, who control the closure timeline (consent order still outstanding). Transformation spend is coming down, funding AI and business investment.

Citi is deploying AI at scale across four buckets — business strategy/revenue, productivity/process, defensive capabilities (cyber/fraud/AML), and workforce — with detail promised at the May Investor Day. Management was emphatic the firm is pursuing organic growth only and is not pursuing any acquisition.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.