Citigroup Q4 Earnings Call Highlights

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Citigroup NYSE: C used its fourth-quarter 2025 earnings call to highlight a “strong quarter” and what CEO Jane Fraser described as a “very good year of progress,” emphasizing improving returns, broad-based revenue growth, continued transformation progress, and significant capital return to shareholders. Management also outlined key financial expectations for 2026, including mid-single-digit net interest income growth excluding markets and an efficiency ratio target of around 60%.

Fourth-quarter results and notable item

Citi reported fourth-quarter net income of $2.5 billion, EPS of $1.19, and return on tangible common equity (ROTCE) of 5.1% on $19.9 billion in revenue, according to CFO Mark Mason. Results were affected by a “notable item” tied to the held-for-sale accounting treatment of Citi’s remaining operations in Russia.

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Excluding that notable item, Citi reported adjusted net income of $3.6 billion, adjusted EPS of $1.81, and adjusted ROTCE of 7.7%. Mason said total revenues were up 2% year-over-year on a reported basis and up 8% when adjusted for the Russia notable item. Net interest income excluding markets increased 8%, while non-interest revenues excluding markets were down 17% reported but up 23% when adjusted for the Russia item.

Fourth-quarter expenses were $13.8 billion, up 6%, driven by higher compensation and benefits, tax charges, legal expenses, and technology, partially offset by productivity savings and lower deposit insurance expenses. Citi’s cost of credit was $2.2 billion, “primarily consisting of net credit losses in U.S. cards,” Mason said.

Full-year 2025 performance and business momentum

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For the full year, Citi reported net income of $14.3 billion, up 13%, with reported ROTCE of 7.7%. Adjusted for the Russia notable item and a third-quarter goodwill impairment related to Banamex, Citi delivered adjusted net income of $16.1 billion, up 27%, with adjusted ROTCE of 8.8%.

Mason said full-year reported revenue was $85.2 billion, while adjusted revenue was $86.6 billion, up 7% and representing Citi’s “strongest growth in over a decade.” Fraser said Citi generated positive operating leverage for the firm and each of its five businesses for the second straight year, and that “each business had record revenues” with return improvements ranging from 250 to 800 basis points.

Fraser highlighted several business-specific developments:

• Services: Full-year revenues rose 8% and ROTCE exceeded 28%, with fee revenue up 6% and cross-border transaction value up 10%. Security services assets under custody and administration grew 24%. Fraser cited product initiatives including Citi Token Services integration with 24/7 U.S. dollar clearing and expansion of Citi Payments Express to 22 markets.
• Markets: The business delivered record revenues in 2025 and ROTCE rose to 11.6% for the year. Fraser noted fixed income was up 10% despite a challenging year in commodities, and equities revenue reached a record $5.7 billion, supported by “over a 50% increase in prime balances.”
• Banking: Fraser said Citi posted a record year with the best quarter and year for M&A revenues in the firm’s history, contributing to an 11.3% ROTCE for the year. Citi participated in 15 of the 25 largest investment banking transactions of the year and advised companies including Boeing, Pfizer, Nippon Steel, Mars, Johnson & Johnson, as well as firms such as Blackstone and TPG, which management said helped drive a 30 basis point increase in investment banking wallet share.
• Wealth: Citi reported 14% revenue growth for the year and 8% organic net new investment assets (NNIA) growth, with ROTCE above 12%. Fraser pointed to talent recruitment, improved operating efficiency, and partnerships such as with BlackRock as drivers.
• U.S. Personal Banking (USPB): Returns “more than doubled” for the year to the mid-teens, Fraser said, led by product innovation and its “high-quality card portfolio.” Branded cards revenue rose 8% for the year, supported by engagement and acquisitions across proprietary and co-brand relationships including American Airlines and Costco.

Transformation progress, divestitures, and AI

Fraser said Citi is nearing the end of its international consumer divestitures, noting an agreement to sell its consumer business in Poland and “final approvals” underway to sell remaining operations in Russia. She also said Citi closed the sale of a 25% stake in Banamex “just three months after announcing it.” In Q&A, Fraser said Citi is “actively looking at selling some additional smaller stakes as we lead up to an IPO,” with timing and structure guided by market conditions and a goal of maximizing shareholder value.

On transformation, Fraser said more than 80% of programs are at or near target state. She cited the OCC’s removal of Article 17 of the consent order in December as evidence of progress. During Q&A, Fraser said the work must be completed and validated through internal audit before regulators conduct their assessment and closure process, adding that timing is ultimately “up to the regulators.”

Fraser also described accelerating AI adoption across the company. She said colleagues in 84 countries have interacted with Citi’s proprietary tools more than 21 million times, with adoption now above 70%. With much of the transformation behind it, Citi is shifting to using AI and automation to “re-engineer” and simplify processes beyond risk and controls, starting with “just over 50 of the largest and most complex processes” including KYC and loan underwriting.

Capital, credit, and balance sheet

Citi said it returned significant capital to shareholders in 2025. Fraser said the bank repurchased more than $13 billion of common shares during the year, including $4.5 billion in the fourth quarter as part of a $20 billion plan, and that total capital return exceeded $17.5 billion after a dividend increase.

Mason said Citi ended the quarter with a preliminary standardized CET1 ratio of 13.2%, about 160 basis points above its 11.6% regulatory requirement, and maintained an average liquidity coverage ratio (LCR) of 115% with over $1 trillion of available liquidity resources. In Q&A, Mason reiterated the company is still targeting a 100 basis point management buffer and expects to work down toward that level over the next several quarters. He added Citi is not giving quarterly buyback guidance but said investors can expect Citi “would look to do more in 2026” on repurchases.

On credit, Mason said total reserves were over $21 billion, and the reserve-to-funded loan ratio was 2.6%. In cards, he said roughly 85% of the portfolio is to consumers with FICO scores of 660 or higher, with a 7.7% reserve-to-funded loan ratio. He noted delinquency and net credit loss (NCL) rates are performing in line with expectations. Corporate exposure remains “primarily investment grade,” and corporate non-accrual loans and net credit losses remained low during the quarter.

Outlook for 2026 and Investor Day

Looking ahead, Mason guided to net interest income excluding markets rising 5% to 6% in 2026, driven largely by volume growth and mix, including loan growth in cards and wealth and deposit growth in services and wealth, partially offset by declining short-end rates. He also said Citi is targeting an efficiency ratio of around 60% for the full year, supported by productivity savings, lower transformation expenses, continued stranded-cost reduction, and lower severance versus 2025.

In Q&A, Mason said markets revenue could be “relatively flat” year-over-year, while noting mix matters and that financing and spread products activity could support higher NII within markets. He also said Citi expects card NCLs to remain within the ranges provided for 2025.

Fraser reiterated Citi’s focus on completing its transformation and maintaining its trajectory toward the 10% to 11% ROTCE target and another year of positive operating leverage. Citi will provide additional detail on strategy and targets at an Investor Day scheduled for May 7.

The call also marked Mason’s final earnings call as CFO. Fraser said he “helped guide the bank through the pandemic” and drove remediation work tied to consent orders, while Mason said he remains committed to supporting the leadership team as Citi continues working toward its return targets.

About Citigroup NYSE: C

Citigroup Inc is a global financial services company headquartered in New York City with roots tracing back to the City Bank of New York, founded in 1812. The modern Citigroup was created through the 1998 merger of Citicorp and Travelers Group and has since operated as a diversified bank holding company that provides a broad range of banking and financial products and services to consumers, corporations, governments and institutions worldwide.

Citi's principal businesses include retail and commercial banking, credit card and consumer lending products, wealth management and private banking, and a full suite of institutional services.

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