Citigroup NYSE: C reported third-quarter 2026 net income of $5.2 billion, or $2.85 per share, as revenue rose 8% year over year to $23.8 billion. The bank generated a return on tangible common equity, or ROTCE, of 11.5%, up 180 basis points from a year earlier, while net income increased 17%.
Chief Executive Officer Jane Fraser said the company delivered its best third-quarter revenue in a decade, with growth in four of its five businesses. Expenses were $14 billion, down 2% on a reported basis. Excluding a $726 million Banamex goodwill impairment recorded in the prior-year quarter, expenses increased 3% as Citi pulled forward certain planned investments and severance costs.
“Our overall performance continues to demonstrate the disciplined and consistent execution of our strategy,” Fraser said. She added that Citi expects to exceed its 2026 ROTCE target range of 10% to 11%, while continuing investments intended to support a near-term target of 11% to 13% and a longer-term goal of 14% to 15%.
Services, Wealth Lead Revenue Growth
Services posted a 15% increase in revenue, supported by growth in deposits, commercial card spending, trade loans and cross-border activity. Net interest income in the division rose 17%, while non-interest revenue increased 12%. Average deposits climbed 16% and average loans rose 14%.
Services generated $2.6 billion of net income and a 31.2% ROTCE for the quarter. Fraser highlighted the launches of Citi Token Services in the United Arab Emirates and Japan, as well as Custody+, while assets under custody and administration increased 16%.
Wealth revenue also rose 15%, with growth across all three of its businesses. The unit brought in $38 billion of net new investment assets during the quarter, more than double the prior-year level, and client investment assets grew 15%. Wealth generated net income of $585 million and ROTCE of 14.3%.
Chief Financial Officer Gonzalo Luchetti said the bank expects Wealth to reach its near-term ROTCE target range of 15% to 20%, citing revenue growth, expense discipline and continued client inflows. He said the 5% growth in investment-fee revenue reflected the effects of strategic decisions made a year earlier that Citi is now lapping.
Markets and Banking Results
Markets revenue increased 6%, including a 14% gain in equities and a 4% increase in fixed income. Equities benefited from continued momentum in prime services, where balances grew by more than 40%. Fixed-income results were driven by spread products and other fixed-income activity, while growth in currencies offset lower revenue in rates.
Fraser said Citi has been systematically expanding its equities business by investing in prime balances and technology. She said clients have expressed interest in having an alternative provider in the market and that Citi sees room to gain share while maintaining disciplined client selection and risk management.
Banking revenue rose 6%, as investment banking revenue increased 9%. Equity capital markets revenue surged 77%, partly offset by declines in advisory and debt capital markets revenue. Fraser said Citi held meaningful roles in the quarter’s six largest transactions, including SK Hynix’s IPO and SoftBank’s $11 billion high-yield offering.
Looking ahead, Fraser described the investment banking pipeline as solid, with the U.S. remaining the center of activity for advisory and capital markets. She said debt capital markets activity is being supported by clients acting before rates move higher and remain elevated, while the IPO market remains selective.
Cards, Credit and Capital Returns
Revenue in U.S. Consumer Cards was flat. Net interest income rose 6% on higher interest-earning balances, but non-interest revenue declined 62% because of higher partner-payment accruals and rewards costs tied to growth investments. General-purpose card spending increased 13% and average loans rose 9%, while private-label card activity declined.
U.S. Consumer Cards earned $851 million and produced ROTCE of 21.8%. Luchetti said Citi continues to shift the business toward general-purpose cards, while Fraser said some private-label relationships may migrate toward co-branded arrangements in line with consumer preferences.
Total cost of credit was $2.6 billion, including a $369 million firmwide net reserve build. Citi’s U.S. Consumer Cards cost of credit totaled $1.9 billion, including $1.7 billion of net credit losses and a $208 million reserve build. Luchetti said overall card net credit loss and delinquency rates declined year over year, and 86% of card balances were held by consumers with FICO scores of 660 or higher.
Citi returned more than $4 billion to shareholders during the quarter, including $3 billion of share repurchases, and increased its quarterly common dividend by 12%. Its common equity tier 1 ratio stood at 12.8%, about 120 basis points above its 11.6% regulatory minimum. Tangible book value per share increased 6% to $101.59.
The company said it expects full-year ROTCE above 11%, net interest income excluding Markets growth in the mid- to high-6% range, and a full-year efficiency ratio below 60%. Citi expects a typical seasonal fourth-quarter decline in Markets revenue, potentially around the 20% sequential decline recorded in the prior year or somewhat more following a strong 2026 performance.
Banamex, AI and Rate Environment
Citi closed the sale of a 1.4% Banamex equity stake, bringing total divestment to 49%. The company is preparing to deconsolidate Banamex next year, with an IPO expected afterward when market conditions and regulatory requirements permit. Luchetti said Citi expects to recognize an approximately $9 billion cumulative translation adjustment-related loss through profit and loss in early 2027 as part of deconsolidation, while the process is expected to be slightly accretive to its CET1 ratio.
Fraser said Citi is deploying artificial intelligence to improve product development, technology operations, client service and cyber defenses. She said AI and automation benefits have significantly exceeded related investments so far this year. Among the initiatives discussed, Citi has used AI to accelerate product launches by roughly 30% to 40%, while 14,000 engineers use its agentic coding tool, Devin. Fraser said Citi has reduced technology vendor spending by 30% year over year as it brings more work in-house.
On interest rates, Luchetti said a higher-for-longer environment should be a net positive for Citi because of its aggregate asset-sensitive positioning, particularly outside the U.S. He added that the bank remains relatively neutral to U.S. rate moves within 12 months but becomes asset sensitive in the second year as its shorter-duration portfolio reinvests.
About Citigroup (NYSE:C)
Citigroup Inc is a global financial services company headquartered in New York City and listed on the New York Stock Exchange under the symbol C. Through its subsidiaries and businesses, Citi provides banking, lending, investment, payments, wealth management and other financial services to consumers, businesses, governments and institutional clients.
Citi's principal businesses include Services, which supports institutional clients with treasury, trade, securities services and related solutions; Markets, which provides sales, trading, research and financing services; Banking, which offers investment banking and corporate banking; and Wealth, which provides private banking and wealth management.
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