ii view: Citigroup results break records
Rightsized and simplified and now focused on initiatives including modernising infrastructure and enhancing data. Buy, sell, or hold?
15th October 2025 15:28
by Keith Bowman from interactive investor
Third-quarter results to 30 September
- Revenue up 9% to $22.1 billion
- Earnings per share (EPS) up 23% to $1.86 per share
- Capital cushion or CET 1 ratio of 13.2%, down from 13.7% a year ago
Chief executive Jane Fraser said:
“The relentless execution of our strategy is delivering stronger business performance quarter after quarter and improving our returns. The cumulative effect of what we have done over the past years – our transformation, our refreshed strategy, our simplification – have put Citi in a materially different place in terms of our ability to compete. Investments in new products, digital assets and AI are driving innovation and improved capabilities across the franchise."
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ii round-up:
Citigroup Inc (NYSE:C) detailed record third-quarter revenues for each of its five divisions, with the New York headquartered bank continuing to focus on reducing costs and improving efficiency.
Total second-quarter revenue up 9% to $22.1 billion drove adjusted earnings 23% higher to $1.86 per share. Analysts had been expecting outcomes of $21.1 billion and $1.60 per share respectively. Business and investor activity in relation to AI helped drive revenue from Investment Banking and Markets up 34% and 15% respectively.
Shares in the S&P 500 bank rose almost 4% in post results US trading having come into these latest numbers up by more than a third so far in 2025. That’s similar to European rival Barclays (LSE:BARC) and comfortably ahead of a near 13% gain for the S&P 500 index year-to-date.
Citi’s transformation programme has included a move from two giant divisions to five core businesses, aiding a spotlight on areas of growth and reducing management layers and costs.
Excluding charges in relation to a previous stake sale in Mexican subsidiary Banamex, a cost income or efficiency ratio of 61.4% fell from 65% year ago.
Under Wall Street’s only female head, Citi is targeting an efficiency ratio of below 60% come 2026 or just after.
Shareholder returns of $6.1 billion during the quarter included $5 billion of share buybacks. A previously announced dividend of $0.60 per share is up from the prior quarter’s $0.56 per share.
Broker Morgan Stanley highlighted its ‘overweight’ stance post the results. Fourth-quarter numbers are scheduled for 14 January.
ii view:
Citigroup is today focused as a banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home US marketplace. In 2024, US personal banking generated its biggest slug of sales at 25%. That was followed by Markets, including equity and fixed income trading, at 24.4%. Then Services, offering treasury and trade solutions, at 24.2%. Corporate and investment banking chipped in 17% and Wealth Management most of the balance.
For investors, the full impact of US trade tariffs could yet hit US corporate customers, reduce business and potentially raise credit provisions. Previous overseas business disposals under the transformation programme have reduced geographical diversification. Credit provisions increased by $1.7 billion from the previous quarter to $23.8 billion, while a forward price/earnings (PE) ratio above the three- and 10-year average may suggest the shares are not obviously cheap.
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More favourably, management’s transformation programme is ongoing, focusing on initiatives including modernising infrastructure and enhancing data. Diversity across its operations persists despite a more focused strategy. A capital cushion, or CET1 ratio of 13.2% sits 1.1% above the regulatory requirement, while a focus on shareholder returns leaves the shares on a forecast dividend yield of just over 2%.
In all, and while risks remain, a consensus analyst fair value estimate above $110 per share points to ongoing optimism on Wall Street.
Positives:
- Business transformation
- Focus on shareholder returns
Negatives:
- Uncertain economic outlook
- Reduced geographical diversity
The average rating of stock market analysts:
Buy
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