Citigroup (C.US) released its fourth-quarter 2025 earnings before the market opened on January 14 Eastern Time, reporting earnings per share that exceeded expectations, while revenue fell slightly short. The data showed revenue of $19.87 billion, a year-over-year increase of 2.1%, but $580 million lower than market expectations; non-GAAP earnings per share were $1.81, beating market expectations by $0.19. Citi's Q4 revenue growth was primarily driven by contributions from banking, treasury services, US Personal Banking, and wealth management, but was partially offset by a decline in the "All Other" segment. Excluding the impact of special items related to Russia, revenue actually grew by 8%. The quarter's credit loss provision was $2.2 billion, primarily driven by $2.2 billion in net credit losses and an additional $30 million provision for loan losses (ACL) due to increased net loan activity, with changes in loan quality partially offsetting this impact. Net credit losses decreased by 2% compared to the same period last year, mainly due to improvements in US Personal Banking, although increased losses in the legacy franchises largely offset this improvement. The credit loss provision for the same period last year was $2.6 billion, which included $2.2 billion in net credit losses and a $351 million provision due to increased net loan activity and changes in the macroeconomic outlook.
Notably, after lagging behind Wall Street peers for years, Citigroup's dealmaking business is catching up. Under the leadership of CEO Jane Fraser, the bank's financial advisory fees surged 84% in the fourth quarter, driving full-year investment banking revenue to grow by over 50% year-over-year, setting a historical record. According to the earnings report released on Wednesday, this performance significantly outpaced its larger competitor, JPMorgan Chase (JPM.US), which saw only 6% growth in this business for 2025. Citigroup, long struggling to break into the top tier of investment banks, is achieving breakthroughs through a business reorganization. Vis Raghavan, the investment banking head Fraser recruited from JPMorgan in 2024, is now focused on rebuilding Citi's investment banking footprint. In the fourth quarter, the bank's total investment banking fees, including debt and equity underwriting and M&A advisory, grew by over one-third to $1.29 billion, though this still trailed JPMorgan's $2.35 billion.
Overall, the growth in investment banking revenue, combined with strong performance in the global treasury services business, helped drive Citigroup's adjusted earnings per share to $1.81, nearly 20 cents higher than the average analyst estimate. The New York-based bank's return on tangible common equity, a key measure of profitability, also exceeded market expectations. Fraser, who has been at the helm for nearly five years, has continued to recruit executives from JPMorgan and Bank of America to help transform key divisions, reverse Citi's lagging position, and enhance its competitiveness. Last year, the bank reached a long-awaited milestone—its market capitalization exceeded the book value of its assets for the first time since 2018. In a vote of confidence, the board also granted Fraser the additional role of board chair.
After investing heavily to meet regulatory requirements and improve internal systems, Citigroup is now focusing on cost control. According to a Monday report, the bank will cut 1,000 jobs this week. After addressing technology and data issues and divesting its Mexican retail business, further staff reductions are still needed this year to achieve its personnel cost targets. Furthermore, Citigroup's fourth-quarter fixed-income trading revenue reached $3.46 billion, exceeding analyst expectations; stock trading revenue was $1.08 billion, slightly below expectations. Overall markets revenue decreased by 1% compared to the same period last year. Despite a stock price drop this week following former President Trump's proposal to cap credit card fees at 10%, Citi stated that its branded cards revenue still grew by 5%. The division, which launched the Strata Elite credit card last July, is actively competing with premium offerings from JPMorgan and American Express.
Wealth management, led by another external hire, Andy Sieg, saw revenue grow by 7% this quarter, supported by private banking and Citigold services.
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