Citi Group’s Encouraging Third Quarter Results
As reported by CEO Jane Fraser on Tuesday, Citigroup is finally experiencing a consistent surge in financial performance, with plenty of room for future improvements. The multinational investment bank and financial services corporation, which Fraser has been transforming into a smaller and simpler organization over the past five years, has lately reported a 9% year-over-year increase in net income for the third quarter. The earnings per share for this period reached $1.86, surpassing Wall Street’s predicted average of $1.72. [source]
Record Revenue Across All Five Primary Businesses
All five primary businesses of Citi generated record third-quarter revenue, leading to positive operating leverage where revenues outpaced expenses. The business and investment banking unit led the surge with a 34% increase in revenue compared to the same period last year. The U.S. personal banking division marked its 12th consecutive quarter of positive operating leverage.
Fraser stated, “The consistently strong results we’ve been delivering are a consequence of how we have fundamentally changed the bank in recent years. And the best part is, there is much more upside ahead.”
Investor Confidence and Future Profitability Metrics
The promising results boosted investor confidence, leading to a 3.5% rise in Citi’s share price by late afternoon. Fraser, who is the Most Powerful Woman in Banking for the fifth consecutive year, expressed her confidence in Citi’s ability to achieve a key profitability metric in 2026. The $2.6 trillion-asset company aims for a 10-11% return on tangible common equity next year, driven by continued revenue momentum across the firm, improved efficiency, and strategic capital management.
Despite the progress, Fraser admits, “There isn’t, I think, a single person in our firm that feels that we are declaring victory. We’ve still got a long way to go.” Citi plans to reveal future profitability metrics at the bank’s investor day on May 7, 2026.
Analyst Commentary and Expert Quotes
Analysts have generally responded positively to the results. Glenn Schorr, an analyst at EverCore ISI, pointed out that while neither the third-quarter return on tangible common equity metric nor the return on equity metric have met Citi’s targets yet, the bank’s progress in transformation and execution in its businesses cannot be denied.
Turnaround Plan and Overseas Market Contractions
When Fraser took over as CEO in 2021, she introduced an ambitious turnaround plan. The bank was struggling with regulatory consent orders due to risk management failures, missed financial targets, and rising investor frustration. Since then, the bank has focused on transforming its risk management and internal control systems, including enhanced automation and digitization. Over two-thirds of the risk programs are now at or near the bank’s target state.
During Fraser’s tenure, Citi has pursued contractions in 14 overseas markets. For instance, Citi Handlowy, its Polish subsidiary, agreed to sell its consumer banking business to Velobank. The deal is expected to close by mid-2026.
Furthermore, Citi also made significant progress on its plan to divest Banamex, its retail banking franchise in Mexico. The bank recently announced a deal to sell a 25% equity stake of Banamex to Mexican businessman Fernando Chico Pardo for approximately $2.3 billion. The deal is anticipated to close in the second half of 2026, subject to regulatory approvals. The rest of the franchise will be divested through an initial public offering.
Looking Ahead
For the full year, Citi slightly adjusted its guidance. While the bank initially projected revenues to be $84 billion and expenses to be $53.4 billion, it now expects both figures to be higher, although the exact amounts were not specified.
As Citi continues its journey towards a more streamlined and efficient model, the market and investors will be closely watching its progress and growth in the coming years. The ongoing improvements and promising quarterly results certainly reflect a strong potential for the banking giant.
