Citigroup (NYSE:C) is showing that its sweeping overhaul is starting to pay off.

The bank reported posted third-quarter revenue of $22.09 billion, up 9% year over year and comfortably ahead of expectations, as strong performances across Markets, U.S. Personal Banking, and Investment Banking lifted results.

Net income rose to $3.75 billion, while earnings per share jumped to $2.24 from $1.51 a year earlier. CEO Jane Fraser credited the gains to Citi's investment in digital assets and AI, alongside progress on its Banamex divestiture, as the bank continues reshaping itself for a leaner, more focused future.

Also Read: Citi To Cut 3,500 Tech Jobs In China In Global Restructuring Spree

Here’s a breakdown of Citi’s report:

• For fiscal Q3, revenue growth was 9% year-over-year and was $22.09 billion, beating the analyst consensus estimate of $21.09 billion.
• Excluding divestiture-related impacts in both periods, revenues were up 9%.
• Earnings per share were $2.24, an increase from $1.51 a year ago, exceeding the analyst consensus estimate of $1.90.
• Net income was $3.75 billion, compared to $3.23 billion in the prior-year period.
• Net interest income increased by 12%, driven by Markets, U.S. Personal Banking (USPB), Services, Wealth, Legacy Franchises, and Banking, partially offset by a decline in Corporate/Other. Non-interest revenue increased by 4%, driven by Banking, Wealth, and Legacy Franchises. It was offset by decreases in Corporate/Other, Markets, Services, and USPB.
• Operating expenses rose 9% to $14.3 billion, and the efficiency ratio of 64.7% down by ~30 bps Y/Y.
• Return on average tangible common equity (RoTCE) reached 12.3%. That’s up ~440 bps, and the Common Equity Tier 1 (CET1) Capital ratio was 13.2% for the quarter, ~110 bps above the current regulatory requirement.
• The cost of credit, $2.45 billion, decreased by 8%, reflecting $2.2 billion of net credit losses and a net allowance for credit losses (ACL) build of $236 million, driven by higher volume, changes in portfolio composition, and transfer risk associated with client activity in Russia, partially offset by changes in the macroeconomic outlook.
• Services revenues of $5.36 billion were up 7%, driven by growth in Treasury and Trade Solutions (TTS) and Securities Services.
• Markets’ revenues increased to $5.56 billion, a 15% rise driven by growth in Fixed Income and Equity market revenues.
• Equity markets’ revenues increased to $1.54 billion, a 24% rise, driven by higher client activity in derivatives and increased volumes in cash equities, along with continued momentum in prime services, which saw record prime balances.
• Banking revenues increased 34% to $2.13 billion, driven by growth in Corporate Lending and Investment Banking.
• Investment Banking revenues increased by 23% to $1.15 billion, primarily driven by a 17% rise in Investment Banking fees, reflecting growth in Debt Capital Markets (DCM), Equity Capital Markets (ECM), and Advisory.
• Wealth revenues increased 8% to $2.16 billion, driven by growth across Citigold and the Private Bank, partially offset by lower revenues in Wealth at Work.
• U.S. Personal Banking (USPB) revenues of $5.33 billion increased by 7%, driven by growth in Branded Cards and Retail Banking, partially offset by a decline in Retail Services.

Fraser added that Citi returned over $6 billion to common shareholders through share repurchases and dividends. This brings the year-to-date total to $12 billion.

Outlook

Citigroup expects fiscal 2025 revenue to be higher than its prior estimate of $84 billion, compared to the analyst consensus estimate of $84.95 billion. The banking firm reiterated that expenses would be higher than the previously estimated $53.4 billion.

The company reiterated the 2025 Branded Cards NCL range of 3.50% to 4.00% and the Retail Services NCL range of 5.75% to 6.25%.

It reiterated that the ACL build will be a function of the macroeconomic environment and business volumes.

Price Action: C stock is trading higher by 0.62% to $96.7 premarket at last check on Tuesday.

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