Citigroup Inc. (C) delivered a robust performance in Q2 2025, underscoring solid momentum across its core businesses and meaningful advancement in strategic initiatives. Net income surged to $4.0 billion, a 25% increase from the prior year, while earnings per diluted share rose to $1.96 from $1.52. Total revenues climbed 8% YoY to $21.7 billion, driven by strength across business lines, and returns improved meaningfully, with RoTCE rising to 8.7% and ROCE to 7.7%.

Citigroup maintained cost discipline, with operating expenses inching up 2% YoY to $13.6 billion, primarily reflecting higher compensation tied to severance and ongoing investments in tech transformation. However, the cost of credit rose 16% to $2.9 billion, driven by a larger allowance build amid a more cautious macro outlook and Russia-related risk. Supporting credit stability, the allowance for credit losses increased to $23.7 billion, while non-accrual loans climbed 49% YoY to $3.4 billion, with notable upticks in both corporate and consumer portfolios.

In terms of capital strength, Citi’s CET1 ratio stood firm at 13.5%, with book value and tangible book value per share up 7% and 8%, respectively. The bank returned $3.1 billion to shareholders, including $2 billion in buybacks as part of its broader $20 billion repurchase program, resulting in a payout ratio of 82%.

Segment results were broadly positive:

• Services continued to shine with $5.1 billion in revenue (+8% YoY) and a standout RoTCE of 23.3%, though net income dipped 3% YoY. Treasury and Trade Solutions and Securities Services drove performance, aided by 9% growth in cross-border transactions and a 17% increase in assets under custody.
• Markets posted its best second quarter since 2020, with $1.7 billion in net income and a RoTCE of 13.8%, fueled by record Equities performance.
• Banking revenues jumped 18% YoY, translating to $0.5 billion in net income and an improved 9.0% RoTCE, as Citi participated in several high-profile deals.
• Wealth management saw revenues up 20% YoY, lifting net income to $0.5 billion and RoTCE to 16.1%, with growth across all lines.
• U.S. Personal Banking delivered a notable turnaround, with net income rising to $0.6 billion and RoTCE improving to 11.1%, supported by branded card growth and stronger deposit spreads.

Management reaffirmed full-year guidance, targeting revenues of $84.1 billion and expenses slightly below $53.4 billion, with net interest income (ex-Markets) expected to grow 2–3%. CEO Jane Fraser emphasized Citi’s progress toward higher, sustainable returns, describing the 10–11% RoTCE goal for 2026 as a midpoint, not an endpoint.

The bank continues its transformation, focusing on tech modernization, AI deployment, and process streamlining, with notable strides in workforce realignment and productivity gains. Meanwhile, Citi remains on track with its planned Banamex IPO, pending regulatory and market conditions.

While acknowledging a more challenging macroeconomic backdrop than previously anticipated, management highlighted Citi’s resilient client base and strong liquidity, with $960 billion in available resources. The bank positions itself as a “port in the storm” for clients navigating volatility, underscoring its commitment to long-term value creation and disciplined capital return.

Overall, Citigroup's Q2 2025 results reflect a well-rounded performance, with rising profitability, expanding client activity, and continued strategic execution despite a complex global environment.