Strong start to 2025 as Citigroup executes diversified strategy

Overview

Citigroup reported a solid first quarter in 2025, with improved profitability, positive operating leverage, and revenue growth across all five core business segments. Net income rose by over 20% year-over-year, supported by cost reductions and stronger Markets and Wealth revenues.

CEO Jane Fraser highlighted: “From quarter to quarter, we are building on our track record of progress. We remain intently focused on executing our strategy, which is based on a diversified business mix and will perform in a wide variety of macro scenarios. When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency. The deep knowledge and breadth of capabilities we bring to the many markets where we operate are a point of distinction as we continue to help our clients navigate an uncertain environment.”

Q1 2025 vs. Q1 2024:

Net income recorded a value of $4.1bn (+21% YoY), while diluted EPS increased to $1.96 (compared to $1.58 in Q1 2024).
Revenues rose to $21.6bn (+3% YoY), driven by growth in each of Citi’s businesses.
- Services revenue recorded a value of $4.9bn (+3% YoY), driven by growth in Treasury and Trade Solutions (TTS), which continued to gain market share.
  - Net interest income increased 5%, driven by higher deposit spreads as well as an increase in deposit and loan balances.
  - Non-interest revenue declined 4%, driven by a decline in Securities Services due to the absence of certain episodic fees in the prior-year period, higher revenue share and the impact of FX in both TTS and Securities Services.
  - TTS revenues were $3.6bn (+4% YoY), driven by a 5% increase in net interest income, partially offset by a 2% decrease in non-interest revenue.
  - Securities Services revenues were $1.2bn (flat YoY), driven by a 6% decrease in non-interest revenue, offset by a 7% increase in net interest income, driven by higher deposit balances.
- Markets revenues were $6.0bn (+12% YoY), driven by growth in both Fixed Income and Equity markets revenues.
  - Fixed Income markets revenues were $4.5bn (+8% YoY), driven by growth across rates and currencies as well as spread products and other fixed income.
  - Equity markets revenues were $1.5bn (+23% YoY), primarily driven by equity derivatives, on increased market volatility and higher client activity, and momentum in prime services, with prime balances up approximately 16%.
- Banking revenues were $2.0bn (+12% YoY), driven by growth in Investment Banking as well as the impact of mark-to-market on loan hedges, partially offset by a decline in Corporate Lending, excluding mark-to-market on loan hedges.
  - Investment Banking revenues were $1.0bn (+12% YoY), driven by an increase in Investment Banking fees of 14%, driven by growth in Advisory, partially offset by declines in Equity Capital Markets (ECM) and Debt Capital Markets (DCM).
  - Corporate Lending revenues were $903m (-1% YoY), driven by the impact of lower loan balances and higher recoveries in the prior-year period.
- Wealth revenues rose to $2.1bn (+24% YoY), driven by growth across Citigold, the Private Bank and Wealth at Work.
  - Private Bank revenues were $664m (+16% YoY), primarily driven by higher deposit spreads and higher investment fee revenues.
  - Wealth at Work revenues were $268m (+48% YoY), driven by higher deposit spreads, higher lending revenues and higher investment fee revenues.
  - Citigold revenues were $1.2bn (+24% YoY), driven by higher deposit spreads, higher investment fee revenues and higher lending revenues, partially offset by lower deposit balances.
- U.S. Personal Banking (USPB) revenues grew slightly to $5.2bn (+2% YoY), driven by growth in Branded Cards and Retail Banking, largely offset by a decline in Retail Services.
  - Branded Cards revenues were $2.9bn (+9% YoY), partially driven by interest-earning balance growth of 8% and higher card spend volume, up 3%.
  - Retail Services revenues declined to $1.7bn (-11% YoY), primarily driven by higher partner payment accruals.
  - Retail Banking revenues were $661m (+17% YoY), driven by the impact of higher deposit spreads, largely offset by the deposit impact from the client transfers to Wealth sector.
Operating expenses decreased to $13.4bn (-5% YoY), driven by a smaller FDIC special assessment, the absence of a restructuring charge and lower compensation expenses.
Cost of credit increased to $2.7bn (+15% YoY), driven by a higher net build in the allowance for credit losses (ACL) related to deterioration in the macroeconomic outlook in the current quarter relative to the prior-year period, and higher net credit losses in the card portfolios in USPB.
Return on Equity (ROE) recorded a value of 8.0%, while Return on Tangible Common Equity (ROTCE) was 9.1%.
Book value per common share rose to $103.90 (+5% YoY), while tangible book value per common share rose to $91.52 (+6% YoY).
CET1 ratio was 13.4% (vs. 13.6% in Q4 2024), driven by the payment of common and preferred dividends as well as common share repurchases, higher risk-weighted assets and higher deferred tax assets.
The bank returned ~$2.8bn to shareholders in Q1 2025, including $1.75bn in share repurchases under its $20bn buyback program and common dividends.

Citigroup remains focused on executing its diversified strategy amid macroeconomic uncertainty. Management highlighted continued simplification efforts, efficiency gains, and strong cross-border capabilities to help clients navigate global markets. With solid capital and momentum across segments, the bank is positioned to build on recent progress.

The week of the publication of the first quarterly results for this year did not bring very good feelings among investors, despite the fact that Citigroup met or even exceeded the main estimates of analysts on Wall Street. C shares have experienced a depreciation in price by about -1% since the day of the announcement of the results and so far, and since the beginning of this year, it has fallen by more than -10%, amid global uncertainty. As in the case of the other major banks in the US, the price of Citigroup shares has been on a rather drastic downward slope since the beginning of March, still trading below the 50-day moving average.