Citigroup Q1 Earnings Call Highlights

Key Points

• Citigroup reported an exceptionally strong Q1 with net income of $5.8 billion, EPS of $3.06 and revenues up 14%, driven by double-digit growth in four of five core businesses; Services (net income $2.2B, ROTCE 27%) and Markets (revenue >$7B, +19% revenue, net income $2.6B) led the outperformance.
• Citi repurchased $6.3 billion of stock and is nearing completion of its $20 billion buyback plan, while ending the quarter with a 12.7% CET1 ratio (about 110 bps above regulatory minimum), helped by roughly $4 billion of capital released from the sale of its remaining Russian operations.
• Management reiterated a 2026 target of 10–11% ROTCE but warned of seasonality and macro uncertainty; it expects an efficiency ratio around 60% with continued headcount reductions, and flagged credit reserves of nearly $22 billion (firm cost of credit $2.8B and an allowance build of $597M) with U.S. card net loss guidance of 4.0–4.5%.

Citigroup NYSE: C executives highlighted what CEO Jane Fraser called an “exceptionally strong start to 2026,” driven by broad-based revenue growth, improved operating leverage, and outsized performance in Services and Markets during the company’s first-quarter earnings call.

First-quarter results and business mix

Fraser said Citigroup reported first-quarter net income of $5.8 billion, earnings per share of $3.06, and return on tangible common equity (ROTCE) of 13.1%. She noted revenues rose 14% and that “four of the five core businesses saw revenue up double digits,” with another quarter of positive operating leverage.

Chief Financial Officer Gonzalo Luchetti, who said this was his first quarter in the role, cited firm revenues of $24.6 billion and expenses of $14.3 billion, up 7% year over year. Luchetti said the efficiency ratio was 58%, improving by roughly 400 basis points versus last year due to revenue growth outpacing expenses. He added that the quarter included “nearly $500 million of severance” as the company targets efficiencies and lower headcount.

Services and Markets led performance

Fraser repeatedly emphasized Services, calling it Citi’s “crown jewel,” and said the business delivered “exceptional” results. She pointed to 40% growth in new mandates, a 17% revenue increase, 12% growth in cross-border transactions, 16% deposit growth, and assets under custody and administration up more than 20%.

Luchetti said Services produced revenue growth across both Treasury and Trade Solutions and Securities Services, with net interest income up 18% and non-interest revenue up 15%. Services delivered net income of $2.2 billion and ROTCE of 27%, according to Luchetti.

Markets also posted what Fraser described as its best result in more than a decade, surpassing $7 billion in revenue for the first time in 10 years. Luchetti said Markets revenue rose 19%, driven by a 13% increase in fixed income and a 39% jump in equities. He noted commodities strength within spread products and other fixed income, and said prime balances rose more than 50%. Markets produced net income of $2.6 billion and ROTCE of 18.7%, he said.

During Q&A, Fraser told Evercore ISI’s Glenn Schorr that Services growth is coming from “deepening with existing clients, new client acquisition, and new product innovations,” and argued tokenization is a benefit rather than a threat. She pointed to Citi’s work in “real-time payments” and said the BlackRock win was “the most notable” in Securities Services but “far from the only” one.

Banking, Wealth, and Cards: momentum with investment and credit focus

In Banking, Fraser said fees increased 12% amid a “record first quarter for us in M&A,” and cited ECM up more than 60%. Luchetti quantified segment revenue growth at 15%, with M&A fees up 19% and ECM fees up 64%, partially offset by DCM fees down 6%. Banking net income was $304 million, with ROTCE of 15.8%, he said.

Wealth revenue rose 11%, according to both Fraser and Luchetti, marking what Fraser called the business’s “eighth straight quarter of growth,” with results now including U.S. Retail Banking. Luchetti said Wealth recorded roughly $15 billion of net new investment asset flows in the quarter and $43 billion over the past 12 months, equating to about 7% organic growth. Wealth net income was $432 million and ROTCE was 10.8%, he said.

For U.S. Consumer Cards, Fraser said revenues grew 4% with spend up 5%, and she said delinquencies and credit losses declined and were “well in line with expectations,” adding the portfolio is “heavily weighted to prime.” Luchetti said the company is increasing transparency by splitting disclosures between general purpose and private label, citing acquisition growth of 12% and spend volume up 6% in general purpose cards. Cards net income was $732 million, with ROTCE of 19.2%, he said.

On credit, Luchetti said firm cost of credit was $2.8 billion, driven primarily by U.S. cards net credit losses and a firmwide allowance build of $597 million. He said the allowance build reflected “increased uncertainty in the macroeconomic outlook,” with reserves incorporating an eight-quarter weighted average unemployment rate assumption of about 5.4%, including a downside scenario averaging nearly 7% unemployment. Total reserves were nearly $22 billion, he said.

Capital return, regulatory outlook, and restructuring progress

Fraser said Citi repurchased $6.3 billion of shares in the quarter and is “close to completing” its $20 billion share buyback plan. Citi ended the quarter with a 12.7% CET1 ratio, about 110 basis points above its regulatory requirement, and tangible book value grew 8% year over year, she said.

Luchetti said sequentially that CET1 was supported by earnings and by the sale of remaining operations in Russia, which he said released about $4 billion of capital during the quarter. He said the firm’s prior objective was to be around 12.6% CET1 through this year, and “we’re basically there.” Fraser later told UBS’s Erika Najarian that Citi intends to remain about 100 to 110 basis points above the regulatory minimum—its management buffer—and she does not plan to change that “in the immediate future.”

On proposed regulatory changes, Luchetti told Truist’s John McDonald the company expects a “moderate net benefit” from Basel and GSIB proposals, while noting various offsets including operational risk, CVA, and market risk. Fraser added Citi would advocate for changes during the comment period, arguing there is “material duplication” between the notice of proposed rulemaking and the Stress Capital Buffer for certain risks.

Fraser also updated investors on divestitures and simplification. She said Citi completed its exit from Russia in February, has entered agreements to sell an additional 24% of Banamex expected to close in the coming months, and remains on track to close the sale of its consumer business in Poland this summer. On Banamex, Fraser said after closing the next tranche Citi expects to have divested 49%, and she does not anticipate additional stake sales in 2026 ahead of deconsolidation in early 2027; an IPO would “most likely” occur after deconsolidation depending on conditions and regulatory requirements.

Transformation, AI, and 2026 outlook

Management said Citi’s transformation work is progressing, with Fraser stating “90% of our programs are now at or near our target state.” In response to Wells Fargo’s Mike Mayo, Fraser said the remaining work is “primarily related to data used in our regulatory reporting,” and noted that after Citi reaches its target state, internal audit validation and then regulatory assessment drive the closure timeline. She said transformation spending has started to decline as work is completed.

Fraser also outlined how Citi is deploying AI “at scale” and said the firm has established a structured approach across four areas:

• Business strategies, including revenue generation and client experience improvements
• Productivity and end-to-end process improvement, simplifying and automating complex processes
• Defensive capabilities, including cyber, fraud, AML, and risk management
• Talent and workforce implications

On headcount, Luchetti said Citi’s headcount declined quarter over quarter to roughly 224,000 from about 226,000, and he said investors should expect headcount to continue coming down through the year as the bank pursues both tactical cost discipline and longer-term structural efficiencies.

Looking ahead, Fraser said Citi remains “well on track” to deliver 10% to 11% ROTCE for full-year 2026, cautioning that “one great first quarter does not a full year make,” citing first-quarter seasonality, an unclear macro environment, and continued investment needs.

Luchetti said Citi’s full-year outlook is unchanged. Subject to macro and market conditions, Citi expects net interest income excluding Markets to rise about 5% to 6%, non-interest revenue excluding Markets to grow based on momentum in Services, Banking, and Wealth, and an efficiency ratio around 60%. He also said Citi expects a U.S. credit card net credit loss rate of 4% to 4.5%, lower than the aggregate of prior expectations for branded cards and retail services.

Fraser used the question-and-answer portion to push back on speculation about acquisitions, telling analysts Citi is “not interested in anything other than organic growth.”

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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