Citigroup's shares declined following the release of its fourth quarter financial results, which revealed a complex performance characterized by earnings exceeding analyst projections, but revenue figures failing to meet expectations. The report underscored the interplay of solid net interest income growth and vigorous investment banking activity on one hand, against the backdrop of divestiture-related charges from the bank's withdrawal from Russia and rising operating costs on the other.
For the quarter ending December 31, Citigroup posted revenue, net of interest expenses, at $19.87 billion, marking a 2% increase compared to the prior year yet falling short of the consensus estimate of $20.53 billion. When excluding the financial effects stemming from the planned divestiture of AO Citibank in Russia, the bank noted an 8% revenue increase.
Net income saw a 13% decline year over year, amounting to $2.5 billion, which was notably affected by a $1.1 billion after-tax loss connected to the Russian exit. On an adjusted basis, net income stood at $3.6 billion, with earnings per share reaching $1.81, surpassing the forecast of $1.68.
The bank’s net interest income rose by 14%, driven by strong contributions across several segments, including Markets, U.S. Personal Banking, Services, Wealth, Legacy Franchises, and Banking, partially tempered by a drop in Corporate/Other. However, non-interest revenue declined sharply by 27%, primarily due to weaknesses in Legacy Franchises, Markets, U.S. Personal Banking, and Wealth, partly offset by improvements in Banking and Services divisions.
Operating expenses increased by 6% to $13.8 billion, resulting in a 250 basis-point rise in the efficiency ratio year over year to 69.6%. Return on average tangible common equity fell by 100 basis points to 5.1%. Additionally, the bank reported a Common Equity Tier 1 capital ratio of 13.2% for the quarter, which remains comfortably above regulatory minimums by approximately 160 basis points.
The cost of credit increased modestly by 2% to $2.2 billion, driven mainly by higher net credit losses associated with U.S. credit card portfolios.
Examining the bank’s business segments, revenue from Services climbed 15% to $5.9 billion, reflecting continued growth in Treasury and Trade Solutions alongside Securities Services. Excluding Russia-related impacts, this translated to an 8% rise. Conversely, Markets revenue declined 1% to $4.5 billion due to reduced activity in fixed income and equity markets.
Banking segment revenue experienced notable growth of 78% to $2.2 billion, bolstered by increased corporate lending (excluding mark-to-market adjustments on loan hedges) and stronger investment banking outcomes. In particular, investment banking revenue surged 38% to $1.3 billion, supported by a 35% rise in fees driven by advisory services and debt capital markets, though partially offset by weaker equity capital markets.
Wealth management revenue improved by 7% to $2.1 billion, benefiting from increased contributions from Citigold and the Private Bank, albeit offset by diminished performance in Wealth at Work programs. U.S. Personal Banking revenue rose modestly by 3% to $5.3 billion, with growth areas including Branded Cards and Retail Banking contrasting with declines in Retail Services.
Citigroup’s Chair and CEO Jane Fraser emphasized the substantial progress made across the firm in 2025, highlighting record revenue achievements and positive operating leverage in all five business lines. Fraser noted that the Services division strengthened through deeper client partnerships and new mandates, Markets secured a top-three industry position with improved returns, and Banking was integral to several of the year’s largest deals.
Moreover, Fraser pointed out the robust performance in Wealth and strategic launches of significant partnerships, while U.S. Personal Banking notably doubled returns by enhancing customer engagement and expanding product offerings.
During 2025, Citi returned over $17 billion to shareholders - its largest capital distribution since the global pandemic - including $13 billion from share repurchases.
This week, following political calls for a 10% cap on credit card fees, Citi experienced downward pressure on its stock. Revenue from branded credit cards nevertheless increased by 5% to $2.95 billion during the quarter.
Citigroup’s Chief Financial Officer Mark Mason addressed market concerns during the earnings call, outlining the bank's limited exposure to ongoing geopolitical issues. Mason clarified that Citi sold all operations in Venezuela in 2021, including both corporate and retail segments. Although closely monitoring global developments, he declined to discuss forthcoming business strategies related to these regions.
On corporate activity, Mason highlighted sustained momentum in mergers and acquisitions, with several major transactions anticipated, including deals involving Boeing Company, Mars, and Mr. Cooper. He emphasized Citi's position as one of the top three banks in debt capital markets.
Regarding the U.S. economy, Mason described it as resilient amid geopolitical uncertainties. He underlined that spending by Citi credit card customers had grown by 5%, reflecting robust consumer engagement.
Addressing regulatory proposals on credit cards, Mason underscored the importance of affordability but stated that Citi cannot endorse a cap on credit card interest rates. He warned that such caps might restrict credit access, negatively influence the broader economic environment, and generate unintended consequences for Citi’s business operations.
Looking forward, Mason confirmed plans for workforce reduction to continue through 2026 and reaffirmed the bank’s preparations for the Banamex IPO after the sale of a 25% stake to an investor. He also emphasized the critical importance of preserving the Federal Reserve’s independence, advocating that the forthcoming Fed Chair uphold this principle as strongly as current leadership.
For fiscal 2026, Citigroup anticipates net interest income, excluding Markets, to increase by 5% to 6% year over year, driven by growth momentum in Services, Banking, and Wealth. The bank projects branded credit card net credit losses to range between 3.50% and 4.00%, and retail services net credit losses between 5.75% and 6.25%. The allowance for credit losses build will depend on macroeconomic conditions and business volume trends.
Fraser conveyed confidence as the company entered 2026, citing robust firm-wide momentum and a focus on reaching a 10% to 11% return on tangible common equity for the year, with strategic positioning aimed at delivering even stronger future returns.
Reports indicate that Citigroup is set to reduce its workforce by approximately 1,000 employees this week, a part of a multi-year restructuring plan targeting 20,000 job cuts by the end of 2026. This downsizing accompanies efforts to streamline operations, exit significant portions of international retail business, and reorganize core business units for enhanced performance.
As of late September, Citigroup employed roughly 227,000 people and aims to reduce this number to about 180,000 by 2026.
Shares of Citigroup were trading down 1.75% at $114.26 during Wednesday’s session, reflecting market reactions to the earnings report and external developments.