Overview
Citigroup
C · NYSEQ3 2026Financials · Banking
Since the Report − 1.6%
Revenue grew 7.9% year over year, EPS beat the estimate by 7.1%; the stock fell 5.6% in its first reaction.
- RevenueQ3
- $23.85B
- Estimate $23.72B · Beat by 0.5%
- EPSGAAP
- $2.85
- Estimate $2.66 · Beat by 7.1%
Verdict
BUYCiti opened two of three gates and landed in line on the third: revenue beat by 0.5%, EPS by 7.1%, and the return target rose above 11%. Score 72, verdict buy, yet the stock closed down 5.6% because profit and returns slipped from the prior quarter. What matters next is how far Markets revenue falls in the fourth quarter.
Close on Report DayOct 13
$124.53▼ 5.6%Report-Day Move
- Market Cap(Today)
- ≈ $203 B
- 1Y Return(At Report)
- + 30%
- P/E(At Today's Price · $10.25 · Trailing 12M)
- 12.0
- PEG(Next Year Estimate)
- 0.77
- Net Margin(Trailing 12M)
- 17.4%
Earnings Summary
In 30 Seconds- Revenue of $23.85 billion beat expectations by 0.5%, and EPS of $2.85 beat by 7.1%.
- The full-year RoTCE target moved from 10-11% to above 11%, and NII ex-Markets growth from 5-6% to the mid-to-high 6% range.
- The stock closed down 5.6% at $124.53 as the sequential slowdown and a fourth-quarter Markets warning overshadowed the beat.
The Numbers
RoTCE
11.5%
Q2 13.0% · Q3 2025 8.0%
Net Interest Income
$16.98B
Year Over Year ▲ 14% · Ex-Markets ▲ 7%
Stock Reaction
−5.6%
Close to Close · $124.53
Full-Year RoTCE Target
Above 11%
Prior 10 – 11% · Raised
Quarterly Revenue ($ Billion)
22.09
Q3 25 · $22.1 B
19.87
Q4 25 · $19.9 B · QoQ − 10.0%
24.63
Q1 26 · $24.6 B · QoQ + 24.0%
24.77
Q2 26 · $24.8 B · QoQ + 0.5%
23.85
Q3 26 · $23.8 B · QoQ − 3.7% · YoY + 7.9%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- Full-Year NII (Ex-Markets)6.5% – 6.9%6.5%6.9%
Company Wording: Mid-to-High 6% Range · Nine Months ▲ 7%Raised · Midpoint Up 1.2 Points ▲ · Prior 5-6%
- Full-Year RoTCE11%
Target Above 11% · Nine-Month Actual 12.6%Raised · 0.5 Points Above Prior Midpoint ▲
- Full-Year Efficiency Ratio60%
Target Below 60% · Nine-Month Actual 58.0%Tightened · Prior ~60% ▲
- Full-Year U.S. Cards NCL Rate4%
Prior Range 4.0-4.5% · Now Around 4.0%Moved to Low End · 0.25-Point Improvement vs Midpoint ▲
- Q4 Markets Revenue (Sequential)-20%
Q3: $6.11B · Q4 2025: −19.8% · Possibly a Bit MoreSeasonal Decline ▼ · Around −20%
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±3.4% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Services$6.61 BShare 29.5%▲ 15.0% YoY
RoTCE 31.2%
- Markets$6.11 BShare 27.3%▲ 6.0% YoY
Equity markets up 14%
- U.S. Consumer Cards$4.66 BShare 20.8%▲ 0.0% YoY
- Wealth$3.27 BShare 14.6%▲ 15.0% YoY
- Banking$1.74 BShare 7.8%▲ 6.0% YoY
Including loan hedges
Key Metrics
Net Interest Income (Ex-Markets)
$13.7 B
▲ 7.0% YoY8-K
Net Credit Losses
$2.22 B
▲ 0.0% YoYPress Release
CET1 Ratio
12.8%
Press Release
Efficiency Ratio
58.5%
Press Release
Tangible Book Value Per Share
$102
▲ 6.0% YoYPress Release
Capital Returned to Shareholders
$4.10 B
Press Release
Average Deposits
$1.53 T
▲ 11.0% YoYPress Release
Shares are computed over the segment total: $22.4 B. The segment total differs from consolidated revenue ($23.8 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We expect to exceed this year's return target, even as we pull forward investments toward our 11-13% near-term goal — the next waypoints on our path to sustainable returns of 14-15%.”
- Best Third-quarter Revenue in a Decade
- Expects to Exceed Return Target
- Preparing for an AI-driven Future
Summary and Review
Summary
Citigroup reported third-quarter 2026 revenue of $23.85 billion against a market expectation of $23.72 billion. That is a 0.5% beat, so the revenue gate is in line. EPS came in at $2.85, 7.1% above the $2.66 estimate; the earnings gate is open. The bank lifted its full-year RoTCE target from 10-11% to above 11%. NII growth excluding Markets was raised from 5-6% to the mid-to-high 6% range; the guidance gate is open. One in-line and two open gates mean a buy band; score 72.
The stock opened higher and touched $133.50, 1.2% above the prior close. Selling then took over, and the session ended at $124.53, down 5.6%. The market did not read this report as a growth story. Revenue fell 4% and net income 10% from the prior quarter, while RoTCE dropped from 13.0% to 11.5%. Management also flagged a seasonal fourth-quarter Markets decline of around 20%. After a 29.6% gain over the past year, the bar was high.
Our overall view is buy, with reservations. The quality of the quarter is good: Services and Wealth both grew 15%. The efficiency ratio improved by 6.2 points versus the same quarter last year. Management raised its in-year targets once again. What keeps the score in the lower half of the band is the sequential slowdown and a $369 million reserve build. There is also a roughly $9 billion Banamex currency translation loss expected in early 2027; it hits earnings, not capital.
Full Review
Services remains the engine of growth.
Services revenue grew 15% year over year to $6.61 billion and carried 28% of total revenue. Treasury and Trade Solutions rose 16% to $4.90 billion. Its net interest income climbed 18% on higher deposit balances and deposit spreads. Fees helped too: cross-border transaction value and commercial card spend both grew 10%. Securities Services rose 13% to $1.71 billion, with assets under custody reaching $35 trillion. Segment net income increased 27% to $2.64 billion. RoTCE was 31.2%, versus 30.9% in the prior quarter and 25.0% a year ago. This is the bank's most profitable and least cyclical business. Average deposits grew 16% to $1.04 trillion, feeding group interest income. For how rates affect banks, see our rates guide.
Markets and Banking grew yearly but cooled sequentially.
Markets revenue rose 6% year over year to $6.11 billion but fell 13% from the prior quarter. Equity markets grew 14% to $1.73 billion, with prime balances up more than 40%. Fixed income rose 4%, while rates and currencies were flat. Investment banking fees rose 9% to $1.35 billion; the sequential decline was 13%. Equity underwriting jumped 77%, while advisory fell 4% and debt underwriting 3%. Corporate lending revenue dropped 16% on lower spreads. According to the earnings call, CFO Gonzalo Luchetti said deal growth across the industry slowed in the third quarter. Management expects fourth-quarter Markets revenue to fall around 20%, as last year, possibly a bit more. Last year the drop was 19.8%.
Wealth is accelerating while Cards are standing still.
Wealth revenue rose 15% to $3.27 billion. Growth came from all three businesses: Citigold and Retail Banking grew 16%, Private Bank 17%. Net income jumped 93% to $585 million. Segment RoTCE was 14.3%, versus 7.8% a year ago and 14.4% in the prior quarter. Net new investment assets were $38 billion, and client investment assets rose 15% to $759 billion. U.S. Consumer Cards looked flatter, with revenue unchanged at $4.66 billion. Net interest income rose 6%, but non-interest revenue fell 62% on partner payments and rewards costs. Card net credit losses fell 4%, and management moved its full-year loss rate guidance to the low end of 4.0-4.5%. The segment still built $207 million of reserves, and net income fell 8%.
Capital return is strong, but the buffer is thinner.
Citi returned $4.1 billion to shareholders in the quarter, including $3.0 billion of buybacks. Year-to-date repurchases total $13.3 billion under a $30 billion program. The payout ratio was 85% of net income available to common shareholders. Shares outstanding fell 7% in a year to 1.655 billion. That lets EPS grow faster than net income. On the other hand, CET1 was 12.8%, the same as last quarter and below 13.3% a year ago. The regulatory minimum is 11.6%, leaving a buffer of about 1.2 points. Citi assumes the minimum rises to 12.1% in January 2028 and points to 13.1% as a directional target. Tangible book value per share rose 6% to $101.59. The quarterly dividend is $0.67, up 12%.
The threshold that changes the story: $4.9 billion.
The one rule from this report hinges on Markets revenue. Management expects a seasonal fourth-quarter decline of around 20%, which means roughly $4.9 billion. If revenue holds above that level, today's selloff will look overdone. Nine-month RoTCE is 12.6%, so the above-11% full-year target would be comfortably met. If revenue falls clearly below the threshold, the slowdown the CFO described is real. In that case the 11-13% RoTCE band for 2027-2028 becomes harder to reach. The second big item is the roughly $9 billion Banamex translation loss in early 2027. Citi says it will be slightly accretive to CET1, but one quarter of earnings and RoTCE will be distorted. For how to read an earnings day, see our guide.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Services revenue grew 15% year over year to $6.61 billion, and the segment's RoTCE rose to 31.2%.
- Wealth revenue rose 15%, and its net income jumped 93% to $585 million.
- The efficiency ratio fell to 58.5%, a 6.2-point improvement versus the same quarter last year.
- Equity underwriting revenue rose 77%, and Citi participated in all six of the quarter's largest deals.
- Buybacks cut shares outstanding by 7% in a year to 1.655 billion.
- Management improved its RoTCE, NII ex-Markets, efficiency and card loss guidance all at once.
Risks
6- Revenue fell 4% and net income 10% from the prior quarter, and RoTCE dropped 1.5 points to 11.5%.
- Management expects a seasonal fourth-quarter Markets decline of around 20%, possibly more.
- Classifying Banamex as held for sale will put a roughly $9 billion translation loss through earnings in early 2027.
- Card non-interest revenue fell 62% on partner payments and rewards costs, and segment net income fell 8%.
- CET1 of 12.8% is below last year's 13.3%, and the regulatory minimum is expected to rise in 2028.
- The credit provision rose 6% to $2.59 billion, including a $369 million reserve build.
What to Watch
4- ~January 2027Fourth-quarter results will show whether full-year RoTCE stayed above 11%.
- Early 2027Banamex deconsolidation and the roughly $9 billion translation loss are expected to hit earnings.
- 2027-2028Near-term RoTCE target of 11-13%, with Citi aiming for the upper end in 2028.
- January 2028Citi assumes the CET1 regulatory minimum rises from 11.6% to 12.1%.
Upcoming Earnings
To Understand This