Citigroup Q3 2026 Revenue Rises 8% as EPS Jumps 53%

Citigroup Inc. (NYSE: C) reported its highest third-quarter revenue in a decade as growth in Services, Wealth, Markets and Banking lifted revenue 8% year over year to $23.85 billion. Net income rose 40% to $5.25 billion, while diluted earnings per share increased 53% to $2.85. Excluding a Banamex goodwill impairment charge recorded a year earlier, EPS was up 27%.

The bank generated positive operating leverage during the quarter. Reported expenses declined 2% to $13.95 billion, though they increased 3% when the prior-year Banamex charge was excluded, reflecting higher transactional and product-servicing costs, deposit insurance expenses, and compensation and benefits. The reported efficiency ratio improved by about 620 basis points to 58.5%, or by roughly 290 basis points excluding the notable item.

Return on tangible common equity, a non-GAAP measure, reached 11.5%, compared with 8.0% as reported and 9.7% excluding the notable item a year earlier. Year-to-date RoTCE was 12.6%.

Services and Wealth lead revenue growth

Services delivered the strongest segment performance, with revenue increasing 15% to $6.61 billion and net income rising 27% to $2.64 billion. Treasury and Trade Solutions revenue grew 16%, supported by higher average deposit balances, deposit spreads and fee momentum. Securities Services revenue advanced 13%, while assets under custody and administration increased 16% to $35 trillion. Services posted a 31.2% RoTCE.

Wealth revenue also rose 15%, reaching $3.27 billion, as all three of its businesses recorded growth. Net interest income increased 20% on higher deposit spreads and average balances, partly offset by lower mortgage spreads. Non-interest revenue grew 5%, largely because of higher investment fees.

Wealth net income nearly doubled to $585 million, and its earnings-before-tax margin expanded to 22% from 14%. Client investment assets increased 15% to $759 billion, while preliminary net new investment asset flows reached a quarterly record of about $38 billion.

Markets revenue increased 6% to $6.11 billion. Fixed Income Markets revenue rose 4%, with 13% growth in Spread Products and Other Fixed Income offsetting flat revenue in Rates and Currencies. Equity Markets revenue climbed 14% as momentum in prime services outweighed lower derivatives revenue. Markets expenses grew 7%, and net income increased 2% to $1.74 billion.

Banking revenue rose 6% to $1.74 billion. Investment Banking revenue increased 9%, driven by equity underwriting, while advisory and debt underwriting declined. Corporate Lending revenue excluding gains or losses on loan hedges fell 16% because of lower loan spreads, partly offset by higher average loans and commitments. Banking net income increased 40% to $378 million.

Card revenue remains flat as credit costs rise

U.S. Consumer Cards revenue was unchanged at $4.66 billion. Net interest income grew 6% as interest-earning balances increased, but non-interest revenue fell 62% due to higher accruals for partner payments and rewards costs, partly offset by higher interchange and annual fees.

Card spending rose 11%, including a 13% increase in general-purpose credit-card spending. Average card loans grew 6%. However, the segment’s provision for credit losses increased 4% to $1.88 billion, including $1.67 billion of net credit losses and a $208 million reserve build primarily related to changes in the macroeconomic outlook. Net income declined 8% to $851 million.

The card net credit loss rate was 3.66%, down 39 basis points from a year earlier, while the proportion of loans at least 90 days past due declined by 10 basis points to 1.30%.

Across Citigroup, the provision for credit losses increased 6% to $2.59 billion. It included $2.22 billion of net credit losses and a $369 million firmwide net reserve build driven by changes in the macroeconomic outlook and portfolio growth. The bank had more than $22 billion in total reserves at September 30, representing 2.5% of funded loans.

All Other revenue declined 3% on a managed basis to $1.43 billion, and the unit recorded a net loss of $955 million. Legacy Franchises revenue fell 1% as the continuing reduction of revenue from closed and wind-down markets offset 18% growth in Mexico, including the effect of currency translation.

Capital returns and 2026 outlook

Citigroup’s preliminary Common Equity Tier 1 capital ratio was 12.8%, unchanged from the second quarter and about 120 basis points above its current regulatory requirement. The bank returned approximately $4.1 billion to common shareholders through dividends and repurchases during the quarter, including $3 billion of share buybacks. Year-to-date common shareholder distributions totaled about $16.5 billion, including $13.3 billion of repurchases. The quarterly common dividend was increased 12% to $0.67 per share, subject to board approval.

For full-year 2026, management continues to target RoTCE above 11% and an efficiency ratio below 60%, subject to macroeconomic and market conditions. The company expects net interest income excluding Markets, a non-GAAP measure, to grow in the mid-to-high 6% range. It also expects non-interest revenue excluding Markets to benefit from fee momentum in Services, Banking and Wealth, partly offset by U.S. Consumer Cards. Citi expects the U.S. Cards net credit loss rate to be about 4.0%, at the low end of its previously guided 4.0% to 4.5% range.

Over the near term, defined as 2027 through 2028, Citi targets an efficiency ratio of about 55% to 60% and RoTCE of roughly 11% to 13%, excluding anticipated notable Banamex-related effects. Its medium-term targets for 2029 through 2031 include an efficiency ratio below 55% and RoTCE of approximately 14% to 15%. All targets remain subject to macroeconomic and market conditions.

Banamex separation remains a material uncertainty

Citi completed the sale of the remaining 1.4% portion of a previously agreed 24% Banamex stake during the quarter, leaving it with 51% ownership. Deconsolidation is expected in early 2027, depending on factors including transaction structure, market conditions and regulatory approvals.

The bank expects to recognize approximately $9 billion of currency translation adjustment losses when Banamex qualifies as held for sale, affecting net income, EPS and RoTCE. Citi said the cumulative CTA losses associated with the stake sales and deconsolidation would be neutral to regulatory capital, while the combined effect of held-for-sale classification and deconsolidation is expected to be slightly accretive to its CET1 ratio.

The presentation also identified macroeconomic and geopolitical uncertainty, higher interest rates, elevated inflation and conflicts in the Middle East as factors that could cause actual results to differ from management’s expectations.