Citigroup profit jumps 40%, and the bank lifts its 2026 return target
Bank beats third-quarter earnings estimates, but a charge on its Mexican bank Banamex inflated the comparison, and the shares were lower in early trading on Tuesday, October 13.
Key takeaways
Citigroup on Tuesday reported profit of $5.2 billion for the quarter ended September 30, up 40% from $3.8 billion a year earlier, and raised the return it is aiming for in 2026.
Earnings were $2.85 a share, up from $1.86 in 2025, and above an average analyst estimate of $2.66 compiled by the London Stock Exchange Group. Revenue was $23.8 billion, up 8% from $22.1 billion. Chair and chief executive Jane Fraser called that the best third-quarter revenue in a decade.
The 40% comparison is flattered by a charge a year ago. After agreeing to sell a 25% stake in Grupo Financiero Banamex, its bank in Mexico, Citi wrote down the value it carried for that business, a goodwill impairment of $726 million, or $714 million after tax. The charge was booked as an expense in the third quarter of 2025.
Without that charge, Citi said, profit a year ago was $4.5 billion. Against that, profit this quarter was $5.2 billion, and earnings per share rose 27%, not the 53% in the reported comparison. The bank's profit fell 10% from the second quarter.
Citi said the per-share increase also reflected a lower share count from buybacks. It returned $4.1 billion to common shareholders in the quarter, including $3.0 billion of repurchases.
Reported expenses of $14.0 billion fell 2%, which Citi said was impacted by the absence of the Banamex charge along with lower professional services costs. Without the charge, expenses rose 3%, less than the 8% increase in revenue.
Equity return expectations hiked
Citi raised its 2026 target for return on tangible common equity to above 11%, from the 10% to 11% range it had set for 2026. This is profit measured against the tangible equity shareholders have in the bank.
It was 11.5% in the quarter, up from 8% a year earlier, and 12.6% for the first nine months. Both readings are already above the new target. In the bank's statement, Fraser said Citi expects to exceed that target.
Net interest income is what the bank earns on loans and securities minus what it pays for funding. Citi raised its full-year outlook for net interest income excluding it trading business Markets to growth in the mid-to-high 6% range, from about 5% to 6%.
Excluding Markets, that income rose 7% in the quarter and 7% over the first nine months. Total net interest income rose 14%.
Services, the business that handles treasury, trade and securities for companies and institutions, brought in $6.6 billion of the quarter's $23.8 billion in revenue, up 15%, in what Fraser called another standout quarter.
Markets, the trading business, brought in $6.1 billion, up 6% from a year earlier and down 13% from the second quarter.
The shares were lower in early trading. At 9:50 a.m. Eastern time they were at $130.91, down 0.8% from Monday's close, after reaching $133.50.
Frequently asked questions
Is the 40% profit jump a clean comparison?
A year-ago goodwill impairment of $726 million on Banamex inflated it, and without that charge profit rose from $4.5 billion to $5.2 billion.
What return is Citigroup targeting for 2026?
Citi raised its 2026 target for return on tangible common equity to above 11%, from the 10% to 11% range it had set.
Did earnings beat estimates?
Earnings were $2.85 a share, above an average analyst estimate of $2.66 compiled by the London Stock Exchange Group.
How did the shares trade after the report?
They were lower in early trading, at $130.91 at 9:50 a.m. Eastern time, down 0.8% from Monday's close.
