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    C
    Earnings call· Dec 2025(Q4 FY25)

    CITIGROUP INC C

    Jan 14, 2026 Source

    Executive summary

    Citigroup Q4 FY25 — Strong Performance and Transformation Progress

    Citigroup closed FY25 with strong financial results, marked by significant progress in its multi-year transformation and strategic investments across all businesses. The company achieved positive operating leverage and improved returns, while actively managing capital and advancing its regulatory remediation efforts. Management is now shifting focus to AI-driven process innovation and aims for a 10-11% RoTCE in FY26, with continued investment in growth areas.

    Highlights

    7

    • Adjusted EPS was $1.81 and adjusted RoTCE was 7.7% for Q4 FY25.

    • Full-year adjusted RoTCE improved to 8.8%, a 180 basis point improvement.

    • Full-year adjusted net income surpassed $16 billion, with adjusted revenues up 7%.

    • Achieved positive operating leverage firm-wide and in all five businesses for the second straight year.

    • Repurchased over $13 billion in common shares during FY25, contributing to a total capital return of over $17.5 billion.

    • Ended the year with a CET1 ratio of 13.2%, 160 basis points above the regulatory requirement.

    • OCC removed Article 17 of the consent order in December, signaling demonstrable improvement in safety and soundness.

    Concerns

    5

    • Retail services revenues were down 7% in Q4 FY25, primarily due to lower interest-earning balances and loan spread.

    • Total Markets revenues were down 1% in Q4 FY25 against a strong prior year quarter.

    • Corporate/Other NII declined due to a lower benefit from cash and securities reinvestment.

    • Card NCLs are expected to remain within 2025 ranges for 2026, implying potential for higher losses than actual 2025 rates.

    • Management expressed concern over credit card rate caps, citing severe impact on credit access and consumer spending.

    Guidance & targets

    7
    CategoryTargetConfidence
    NII ex-Markets growth
    up between 5% and 6%
    high materiality
    High
    Efficiency ratio
    around 60%
    high materiality
    High
    Operating leverage
    another year of positive operating leverage
    high materiality
    High
    Card Net Credit Losses (NCLs)
    remain within the ranges that we gave for 2025
    medium materiality
    Medium
    Return on Tangible Common Equity (RoTCE)
    10% to 11%
    high materiality
    High
    Share buyback program
    continue to buy back shares against our $20 billion buyback program
    medium materiality
    High
    CET1 management buffer
    100 basis point management buffer
    high materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Services
    Reported revenues were up 15% and 8% adjusted for the Russia notable item driven by growth across both TTS and Security Services. Expenses increased 9%, primarily driven by higher technology expenses, compensation and benefits as well as volume-related expenses. Services delivered net income of $2.2 billion, with an RoTCE of 36.1% in the quarter and 28.6% for the full year.
    NII: up 18%NIR (reported): up 10%NIR (adjusted for Russia): down 11%Total fee growth: 13%Cross-border transaction value: increased 14%U.S. dollar clearing volume: increased 3%Assets under custody and administration: increased 24%Average loans: increased 10%Average deposits: increased 11%Net income: $2.2 billion
    		up 15%8%—RoTCE 36.1%
    Markets
    Revenues were down 1% against a strong fourth quarter last year. Expenses increased 14%, primarily driven by higher legal expenses, compensation and benefits, technology and volume-related expenses. Cost of credit was a benefit of $104 million, primarily consisting of a net ACL release. Markets delivered net income of $783 million with an RoTCE of 6.2% in the quarter and 11.6% for the full year.
    Fixed income revenues: down 1%Equities revenues: down 1%Prime balances: up more than 50%Cost of credit: benefit of $104 millionAverage loans: increased 25%Net income: $783 million
    		down 1%——RoTCE 6.2%
    Banking
    Revenues were up 78% driven by growth in corporate lending and investment banking. Overall revenues were up 32% for the year. Expenses increased 10% driven by higher compensation and benefits. Cost of credit was $176 million which included a net ACL build. 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.
    Investment banking fees: increased 35%M&A: up 84%DCM: up 19%ECM: down 16%Cost of credit: $176 millionNet income: $685 million
    		up 78%32%—RoTCE 13.2%
    Wealth
    Revenues were up 7% driven by growth in Citigold and the Private Bank. Expenses increased 6% primarily driven by investments in technology and volume and other revenue-related expenses. Wealth 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.
    NII: increased 12%NIR: decreased 1%Net new investment asset flows: $7.2 billionClient investment assets: up 14%Net new investment assets (organic growth FY25): 8%End-of-period client balances: up 9%Average loans: up 1%Average deposits: up 1%Pretax margin: 21%Net income: $338 million
    		up 7%14%—RoTCE 10.9%
    U.S. Personal Banking
    Revenues were up 3% driven by growth in Branded Cards and retail banking. Expenses increased 2% driven by higher transactional and marketing expenses. Cost of credit was $1.7 billion driven by net credit losses in cards. 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.
    Branded Cards revenues: increased 5%Branded Cards interest-earning balances: up 4%Branded Cards acquisitions: up 20%Branded Cards spend volume: up 5%Retail services revenues: down 7%Retail banking revenues: increased 21%Cost of credit: $1.7 billionAverage deposits: increased 2%Net income: $845 million
    		up 3%——RoTCE 14.3%
    All Other
    Includes Corporate/Other and Legacy Franchises. Revenues declined across both, with Legacy Franchises impacted by the Russia notable item and wind down markets, and Corporate/Other by lower NII. Expenses were down 6% with a decline in Legacy Franchises. Cost of credit was $449 million, primarily consisting of net credit losses of $341 million driven by consumer loans in Mexico.
    Expenses: down 6%Cost of credit: $449 millionNet credit losses: $341 million
    		declined———

    Operational metrics

    59
    Adjusted EPS
    $1.81
    Q4 FY25

    Excluding the impact of a notable item.

    Adjusted RoTCE
    7.7%
    Q4 FY25

    Excluding the impact of a notable item.

    Full-year Adjusted RoTCE
    8.8%180 basis point improvement
    FY25

    After adjusting for Banamex and Russia.

    Full-year Adjusted Net Income
    >$16 billion
    FY25

    Surpassed $16 billion.

    Full-year Adjusted Revenues
    7%up 7%
    FY25

    Driving positive operating leverage.

    Positive Operating Leverage
    achievedsecond straight year
    FY25

    Each business improved returns by 250 to 800 basis points.

    Services Fee Revenue Growth
    6%
    FY25

    As client relationships deepened.

    Services Cross-border Transaction Value Growth
    10%
    FY25

    As client relationships deepened.

    Markets Fixed Income Revenue Growth
    10%
    FY25

    Despite a challenging year in commodities.

    Markets Equities Revenues
    $5.7 billionrecord
    FY25

    With over 50% increase in prime balances.

    Investment Banking Wallet Share Increase
    30 bpsyear-over-year
    FY25

    Driven by share gains in target sectors, leveraged finance, and sponsors.

    Wealth Revenue Growth
    14%
    FY25

    Direct result of strategy executed over two years.

    Wealth Organic NNIA Growth
    8%
    FY25

    Direct result of strategy executed over two years.

    USPB Returns
    more than doubled
    FY25

    Reaching mid-teens, driven by product innovation, customer engagement, and high-quality card portfolio.

    Branded Cards Revenue Growth
    8%
    FY25

    Driven by robust engagement from customers in spend, borrowing, and new account acquisitions.

    Share Repurchases
    $13 billion
    FY25

    Part of the $20 billion buyback program.

    Total Capital Returned
    $17.5 billionmost since the pandemic
    FY25

    Includes share repurchases and increased dividend.

    Transformation Programs at/near Target State
    over 80%
    Q4 FY25

    Mainly revolved around compliance, risk, controls, and data.

    AI Tools Interactions
    21 million
    Q4 FY25

    Colleagues in 84 countries interacted with proprietary tools.

    AI Tools Adoption
    above 70%
    Q4 FY25

    Continuing to see adoption increase.

    Net Income (reported)
    $2.5 billion
    Q4 FY25

    Reported net income for the full firm.

    EPS (reported)
    $1.19
    Q4 FY25

    Reported EPS for the full firm.

    RoTCE (reported)
    5.1%
    Q4 FY25

    Reported RoTCE for the full firm.

    Total Revenues (reported)
    $19.9 billion
    Q4 FY25

    Reported total revenues for the full firm.

    Total Revenues (adjusted for Russia)
    8%up 8%
    Q4 FY25

    Adjusted for the Russia notable item.

    Noninterest Revenues ex-Markets (reported)
    down 17%
    Q4 FY25

    Reported noninterest revenues excluding Markets.

    Noninterest Revenues ex-Markets (adjusted for Russia)
    23%up 23%
    Q4 FY25

    Adjusted for the Russia notable item, driven by Banking and All Other.

    Expenses (reported)
    up 6%
    Q4 FY25

    Driven by increases in compensation and benefits, tax charges, legal expenses, and technology.

    Cost of Credit
    $2.2 billion
    Q4 FY25

    Primarily consisting of net credit losses in U.S. cards.

    Net Income (reported)
    $14.3 billionup 13%
    FY25

    Reported net income for the full year.

    RoTCE (reported)
    7.7%
    FY25

    Reported RoTCE for the full year.

    Net Income (adjusted)
    $16.1 billionup 27%
    FY25

    Adjusted for Russia notable item and Banamex goodwill impairment.

    Revenue (reported)
    $85.2 billion
    FY25

    Reported revenue for the full year.

    Revenue (adjusted for Russia & divestitures)
    $86.6 billionup 7%
    FY25

    Strongest growth in over a decade.

    Compound Annual Revenue Growth Rate (reported)
    4%
    2021-2025

    On a reported basis.

    Compound Annual Revenue Growth Rate (adjusted)
    5%
    2021-2025

    Adjusted for Russia notable item and excluding divestiture-related impacts.

    Compound Annual Revenue Growth Rate (ex-Legacy Franchises)
    6%
    2021-2025

    Legacy Franchises declined by over $2 billion over the period.

    Expenses (reported)
    $55.1 billion
    FY25

    Reported expenses for the full year.

    Expenses (ex-Banamex goodwill impairment)
    $54.4 billion
    FY25

    Excluding the Banamex goodwill impairment in Q3.

    Severance
    $800 million
    FY25

    Total for the year, contributing to increased compensation and benefits.

    Unemployment Rate Assumption (reserves)
    5.2%
    Q4 FY25

    Incorporated into reserves.

    Total Reserves
    >$21 billion
    Q4 FY25

    With a reserve to funded loan ratio of 2.6%.

    Card Portfolio FICO Scores
    ~85%
    Q4 FY25

    Reflects high credit quality.

    Balance Sheet
    $2.7 trillionincreased 1%
    Q4 FY25

    Driven by growth in loans, partially offset by a decline in investments.

    Net End-of-Period Loans Growth
    3%
    Q4 FY25

    Driven by growth in USPB and Markets.

    Deposit Base
    $1.4 trillionincreased 1%
    Q4 FY25

    Well diversified, driven by growth in Services, partially offset by a decline in Corporate/Other.

    Average LCR
    115%
    Q4 FY25

    Maintained over $1 trillion of available liquidity resources.

    Regulatory Capital Requirement
    11.6%
    Q4 FY25

    Reflects a 3.6% stress capital buffer.

    Stress Capital Buffer (SCB)
    3.6%
    Q4 FY25

    Reflected in the regulatory capital requirement.

    NII ex-Markets growth (FY25)
    nearly 6%
    FY25

    Solid growth in 2025.

    US dollar IRE (100bps drop)
    $300 million
    Q3 FY25

    For a 100 basis point drop in rates.

    Banking Wallet
    north of $100 billion
    2026

    Expected to be constructive.

    Total Deposits Growth
    mid-single digits
    2026

    Expected for the firm.

    Loans Growth (ex-Markets)
    mid-single digits
    2026

    Expected for total ex-Markets loans.

    TTS Average Deposits Growth
    6%
    FY25

    Part of strong Services deposit growth.

    Securities Services Average Deposits Growth
    12%
    FY25

    Part of strong Services deposit growth.

    Wealth EBIT Margin (medium-term target)
    ~20%
    medium-term

    Achieved in FY25.

    Wealth EBIT Margin (long-term target)
    25% to 30%
    long-term

    Still has headway to make.

    NII growth from 2025 levels
    5.5%
    FY25

    Prior expectation for NII growth.

    Industry KPIs

    12
    MetricValueDetails
    Loans$2.7 trillionUSD
    Deposits$1.4 trillionUSD
    Rotce ROE8.8%%
    Cet1 ratio13.2%%
    Capital returns$17.5 billionUSD
    Fee income linesup 35%%
    Allowance reserves>$21 billionUSD
    Net interest incomeup 8%%
    Net charge offs npls3.6%%
    Total operating expenses$13.8 billionUSD
    Provision for credit losses$2.2 billionUSD
    Efficiency ratio operating leverage63%%

    Product announcements

    3
    ProductTypeDetails
    Citi Token Servicesexpansion
    Citi Payments Expressexpansion
    Unified Custody Infrastructure / Single Event Processinglaunch

    Deals & partnerships

    5
    Fernando Chico PardoSale of 25% stake of Banamex

    Closed the sale of a 25% stake of Banamex to one of Mexico's most prominent investors, Fernando Chico Pardo, just 3 months after announcing it.

    BlackRockEnhanced open architecture platform for Wealth

    Notable partnership with industry leaders such as BlackRock that have enhanced our open architecture platform and are elevating the client experience in Wealth.

    Mexico's prominent investorsSale of additional smaller stakes in Banamex

    Actively looking at selling some additional smaller stakes in Banamex as a lead-up to an IPO, following the sale of the 25% stake to Fernando Chico Pardo.

    PolandSale of consumer business

    Signed an agreement to sell our consumer business in Poland as part of international divestitures.

    RussiaSale of remaining operations

    Receiving final approvals to sell our remaining operations in Russia as part of international divestitures.

    Risks & headwinds

    4
    Retail services revenue softnessQ4 FY25

    down 7%

    Mitigation: Business's returns remained solid despite impact from foot traffic and sales at partners.

    Markets revenue declineQ4 FY25

    down 1%

    Mitigation: Attributed to a strong prior year comparable, with full-year Markets revenue up 11%.

    Corporate/Other NII declineQ4 FY25

    declined

    Mitigation: Due to lower benefit from cash and securities reinvestment, actions taken to reduce asset sensitivity in a declining interest rate environment.

    Credit card rate caps

    severe impact on access to credit and consumer spending

    Mitigation: Engaging with administration to foster expansion of accessible and affordable credit; highlighting negative historical and economic impacts of rate caps on credit availability, consumer spending, and GDP.

    What to watch in Q1 FY26

    5

    NII ex-Markets growth

    FY26
    Currentnearly 6% (FY25)
    Targetup between 5% and 6% (FY26)

    Why it matters

    NII ex-Markets is a primary driver of revenue growth and overall profitability, influenced by loan and deposit volumes and investment portfolio management.

    Following solid growth of nearly 6% in 2025, we expect NII ex-Markets to be up between 5% and 6% in 2026.

    Q&A highlights

    8

    Why were Markets revenues flat and RoTCE low in Q4, despite growth in prime balances and loans, while allocated capital remained similar?

    Markets' full-year revenue was up 11%, with Q4 facing a tough prior-year comparison. Momentum in spread products (financing/lending) and equities (prime) is driving higher RoTCE for the full year due to optimal RWA use and capital allocation to higher-returning areas.

    “The fourth quarter was very strong last year, so it's a tough year-over-year comp. But we're seeing particular momentum over the course of the year in parts of the franchise, like spread products where we've been doing more around financing and lending activity, and that is a very optimal use of RWA.”

    asked by Glenn Schorr · answered by Mark Mason

    2 min read5 chapters

    Detailed Narrative

    01

    Transformation Progress and Regulatory Remediation

    Citigroup has made significant strides in its multi-year transformation, with over 80% of its programs now at or near target state, particularly in compliance, risk, and controls. Data progress has been significantly accelerated by AI. The OCC's removal of Article 17 of the consent order in December publicly evidenced demonstrable improvement in Citi's safety and soundness. While some work remains, management is confident in completing it and validating the outcomes, which will then be assessed by regulators.

    02

    AI Adoption and Process Innovation

    The company is leveraging AI to enhance operational capabilities, controls, and tech infrastructure. Proprietary AI tools have been interacted with over 21 million times by colleagues in 84 countries, with adoption rates exceeding 70%. Citi is now focusing on using AI and automation to innovate, reengineer, and simplify over 50 of its largest and most complex processes, including KYC and loan underwriting, aiming to improve client experience and reduce expenses.

    03

    Strategic Investments Driving Growth Across Businesses

    Citi has made targeted investments to drive growth and competitive positioning. Services is expanding digital asset capabilities and product innovations like Payments Express. Markets is filling product capability gaps, improving capacity, and growing prime balances by over 50%. Banking is systematically building out areas with prior gaps, attracting top talent, and gaining wallet share. Wealth is retooling its investment product platform with open architecture and AI-powered capabilities, while Cards is innovating with new products and expanding co-brand offerings.

    04

    Macroeconomic Outlook and Credit Quality

    Management noted the global economy's resilience, with inflation normalizing and central banks becoming more accommodating. Despite a softening US labor market, capital investment remains strong, particularly in tech. China's growth relies on exports, and Europe is taking steps to stimulate its economy. Citi's corporate clients are in strong financial health, predominantly investment grade, and the company's portfolios reflect a high credit quality and a focused risk appetite framework.

    05

    CFO Transition and Future Outlook

    Mark Mason concluded his tenure as CFO, receiving commendation for his leadership through the pandemic and transformation efforts. Gonzalo will succeed him. The company enters 2026 with visible momentum, intensely focused on completing its transformation and delivering a 10-11% RoTCE, along with another year of positive operating leverage. Management anticipates laying out further strategic details and the path to sustainable returns at its upcoming Investor Day.

    AI-generated summary of the company’s earnings call. Not investment advice.