Citi shares rose to the highest level since 2008 after the bank said it would ramp up stock buybacks following a strong result in regulatory stress tests https://t.co/utJt9VNnG4 ...

Core Viewpoint - Citigroup's CEO Jane Fraser announced that the company is exploring the issuance of a stablecoin [1] Group 1 - The exploration of a stablecoin aligns with the growing interest in digital currencies within the financial sector [1] - Citigroup aims to leverage its expertise in banking and technology to develop a stablecoin that meets regulatory standards [1] - The move reflects a broader trend among financial institutions to innovate and adapt to the evolving digital landscape [1]

Financial Data and Key Metrics Changes - The company reported a net income of $4 billion and earnings per share of $1.96, with a return on tangible common equity (ROTCE) of 8.7% [4][19] - Revenues increased by 8% year-over-year, driven by growth across all business lines, with total revenues reaching $21.7 billion [4][19] - Net interest income excluding markets rose by 7%, while non-interest revenues, excluding markets, increased by 1% [20] Business Line Data and Key Metrics Changes - Services revenue grew by 8%, with a ROTCE of 23% for the quarter, driven by robust growth in loans and deposits [5][30] - Markets revenues increased by 16%, with fixed income revenues up 20% and equities revenues up 6% [6][31] - Investment banking fees rose by 13%, with M&A activity up 52% and equity capital markets (ECM) up 25% [33] - Wealth management revenues surged by 20%, with a pretax margin of 29% [35] - U.S. Personal Banking (USPB) revenues increased by 6%, driven by branded cards and retail banking [37] Market Data and Key Metrics Changes - The company experienced strong client activity in both fixed income and equities, with significant growth in prime services and derivatives [6][31] - The average loans increased by 3% across the firm, with a diversified deposit base also growing by 3% [25] Company Strategy and Development Direction - The company is focused on executing its strategy with discipline, improving performance and returns across its businesses while advancing their strategic positions [5][12] - Investments in digital assets and stablecoin infrastructure are being prioritized to enhance competitiveness and client offerings [13][86] - The company aims to achieve a ROTCE target of 10% to 11% next year, viewing it as a waypoint rather than a destination [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the U.S. economy, driven by strong consumer activity and entrepreneurial spirit [15] - The company anticipates some macroeconomic uncertainties but remains optimistic about its trajectory and ability to deliver for clients [16] - The outlook for the full year has been adjusted to expect revenues around $84 billion, with net interest income excluding markets projected to rise closer to 4% [40] Other Important Information - The company returned over $3 billion in capital to shareholders, including $2 billion in share repurchases [9][10] - The CET1 capital ratio stood at 13.5%, significantly above regulatory requirements, with plans for continued share repurchases [10][27] Q&A Session Summary Question: Long-term return profile beyond 2026 - Management refrained from providing specific targets for 2027 but expressed confidence in the firm's strategy and performance across its business lines [45][46] Question: Revenue forecast for the second half of the year - Management acknowledged the seasonality in the second half and indicated that the forecast includes expected market softness [60][64] Question: Capital management and regulatory reforms - Management discussed the binding constraint of standardized CET1 and the ongoing assessment of capital buffers in light of regulatory changes [68][70] Question: Transformation costs and consent order - Management indicated that transformation costs are expected to increase in 2025 but will trend down in 2026, with ongoing efforts to improve operational efficiency [90][94]

Core Viewpoint - Citigroup's CEO stated that the company is exploring the possibility of issuing a stablecoin [1] Group 1 - The exploration of stablecoin issuance indicates Citigroup's interest in digital currencies and blockchain technology [1]

Core Viewpoint - Citigroup maintains its target price for gold at $3,300 per ounce for the 0-3 month period [1] Group 1 - Citigroup's target price reflects a bullish outlook on gold in the short term [1]

Core Insights - The unofficial start of the earnings season was marked by Citigroup Inc and Wells Fargo & Co reporting second-quarter earnings and revenue beats, with Citigroup benefiting from higher banking and markets revenue, while Wells Fargo lowered its income forecast [1] Group 1: Citigroup Inc - Citigroup's stock increased by 1.1%, trading at $88.55, and is on track for its third gain in the last four sessions after reaching a 17-year high of $90.66 [2] - Year-to-date, Citigroup shares have a 26.6% gain, bouncing off a recent support level at $85 [2] Group 2: Wells Fargo & Co - Wells Fargo's stock was down 4.7%, trading at $79.45, marking its largest single-day percentage loss since March 10 and ending a four-day winning streak [3] - The stock is retreating from a previous attempt to surpass its record peak of $83.94 set on July 3, but the 20-day moving average may help contain these losses; year-to-date, Wells Fargo has a 13.4% gain [3] Group 3: Options Activity - Both Citigroup and Wells Fargo are experiencing unusual options activity, with each attracting double the typical volume for this time [4] - The most popular option for Citigroup is the July 90 call, while for Wells Fargo, it is the July 82 call, with new positions being opened for the latter [4]

Financial Performance - Citigroup reported revenues of $21.7 billion in 2Q25, an increase of 8% year-over-year[5] - Net income for 2Q25 was $4.0 billion, a 25% increase compared to 2Q24[5] - The Return on Tangible Common Equity (RoTCE) for 2Q25 was 8.7%, up from 7.2% in 2Q24[5] - Diluted Earnings Per Share (EPS) for 2Q25 was $1.96, a 29% increase year-over-year[5] Capital and Shareholder Returns - Citigroup's CET1 Capital Ratio was 13.5% in 2Q25[5] - The company returned approximately $3.1 billion to common shareholders through share repurchases and dividends in 2Q25[7] - The Board approved an increase to the common stock dividend to $0.60 per share starting in 3Q25, up from $0.56 per share[7] Business Segment Performance - Services revenues increased to $5.1 billion in 2Q25[9] - Markets revenues increased to $5.9 billion in 2Q25[9] - U S Personal Banking revenues increased to $5.1 billion in 2Q25[9]

[Citigroup Financial Summary](index=2&type=section&id=Citigroup%20Financial%20Summary) [Financial Summary](index=2&type=section&id=Financial%20Summary) In Q2 2025, Citigroup reported a net income of $4.0 billion, or $1.96 per diluted share, on revenues of $21.7 billion, driven by growth across all five core businesses, achieving an 8.7% RoTCE and 13.5% CET1 Capital ratio Q2 2025 Financial Highlights | Metric | Q2 2025 | Change vs. Q1 2025 | Change vs. Q2 2024 | | :--- | :--- | :--- | :--- | | **Revenues, net** | $21,668 M | 0% | +8% | | **Net Income** | $4,019 M | -1% | +25% | | **Diluted EPS** | $1.96 | 0% | +29% | | **RoTCE** | 8.7% | (40) bps | +150 bps | | **CET1 Capital Ratio** | 13.5% | +9 bps | (9) bps | | **Book Value per Share** | $106.94 | +3% | +7% | | **Tangible Book Value per Share** | $94.16 | +3% | +8% | - Operating expenses increased by 2% year-over-year to **$13.6 billion**, while provisions for credit losses rose **16% to $2.9 billion**, primarily due to a higher credit reserve build[2](index=2&type=chunk) [Consolidated Statement of Income](index=3&type=section&id=Consolidated%20Statement%20of%20Income) The Q2 2025 Consolidated Statement of Income shows total revenues of $21.7 billion, driven by a 12% increase in Net Interest Income, with operating expenses up 2% and credit loss provisions up 16% Q2 2025 Income Statement Breakdown (vs. Q2 2024) | Item | Q2 2025 (M) | YoY Change | | :--- | :--- | :--- | | Net Interest Income (NII) | $15,175 | +12% | | Total Non-Interest Revenues (NIR) | $6,493 | -1% | | **Total Revenues, net** | **$21,668** | **+8%** | | Total Provisions for Credit Losses | $2,872 | +16% | | Total Operating Expenses | $13,577 | +2% | | **Income from Continuing Operations** | **$4,033** | **+24%** | | **Citigroup's Net Income** | **$4,019** | **+25%** | - The growth in Net Interest Income was a key driver of the overall revenue increase, while Principal Transactions revenue also saw a significant **19% YoY rise to $3.4 billion**[6](index=6&type=chunk) [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, Citigroup's total assets grew 9% to $2.62 trillion, supported by increases in loans and deposits, with total stockholders' equity rising 2% to $213.2 billion Balance Sheet Highlights (as of June 30, 2025) | Item | Amount (B) | YoY Change | | :--- | :--- | :--- | | **Total Assets** | $2,622.8 | +9% | | Total Loans, net | $706.2 | +5% | | Total Deposits | $1,357.7 | +6% | | **Total Liabilities** | $2,408.6 | +10% | | **Total Citigroup Stockholders' Equity** | $213.2 | +2% | - The increase in assets was notably driven by a **27% rise in Trading account assets** and a **43% increase in Deposits with banks** compared to the prior year[9](index=9&type=chunk) [Operating Segments](index=5&type=section&id=Operating%20Segments) [Operating Segment Overview](index=5&type=section&id=Operating%20Segment%20Overview) In Q2 2025, all five core operating segments reported year-over-year revenue growth, with Wealth Management and U.S. Personal Banking showing strong bottom-line performance Q2 2025 Segment Performance (vs. Q2 2024) | Segment | Revenues (M) | YoY Change | Income from Cont. Ops (M) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Services | $5,062 | +8% | $1,448 | -3% | | Markets | $5,879 | +16% | $1,749 | +19% | | Banking | $1,921 | +18% | $461 | +13% | | Wealth | $2,166 | +20% | $494 | +135% | | U.S. Personal Banking | $5,119 | +6% | $649 | +436% | [Services](index=6&type=section&id=Services) The Services segment reported Q2 2025 revenues of $5.1 billion, up 8% year-over-year, driven by growth in TTS and Securities Services, with a RoTCE of 23.3% Services Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | **Total Revenues** | $5,062 M | +8% | | - Treasury and Trade Solutions | $3,674 M | +7% | | - Securities Services | $1,388 M | +11% | | **Net Income** | $1,432 M | -3% | | **RoTCE** | 23.3% | -50 bps | - Key business drivers showed positive momentum, with average deposits up **7% YoY to $857 billion** and average loans up **15% YoY to $94 billion**[16](index=16&type=chunk) [Markets](index=7&type=section&id=Markets) Markets delivered a strong quarter with revenues of $5.9 billion, up 16% year-over-year, driven by Fixed Income and Equity markets, resulting in a 13.8% RoTCE Markets Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | **Total Revenues** | $5,879 M | +16% | | - Fixed Income Markets | $4,268 M | +20% | | - Equity Markets | $1,611 M | +6% | | **Net Income** | $1,728 M | +20% | | **RoTCE** | 13.8% | +310 bps | - The segment's efficiency ratio improved significantly, decreasing by **500 basis points** year-over-year to **60%**[20](index=20&type=chunk) [Banking](index=8&type=section&id=Banking) The Banking segment reported Q2 2025 revenues of $1.9 billion, an 18% increase year-over-year, largely driven by a 13% rise in Investment Banking fees, with a RoTCE of 9.0% Banking Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | **Total Revenues** | $1,921 M | +18% | | **Net Income** | $463 M | +14% | | **RoTCE** | 9.0% | +150 bps | Investment Banking Fee Breakdown (Q2 2025 vs Q2 2024) | Fee Type | Q2 2025 (M) | YoY Change | | :--- | :--- | :--- | | Advisory | $408 | +52% | | Equity Underwriting (ECM) | $218 | +25% | | Debt Underwriting (DCM) | $432 | -12% | | **Total** | **$1,058** | **+13%** | [Wealth](index=9&type=section&id=Wealth) The Wealth segment demonstrated strong momentum with revenues of $2.2 billion, up 20% year-over-year, driven by higher investment fees, leading to a significant RoTCE of 16.1% Wealth Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | **Total Revenues** | $2,166 M | +20% | | **Net Income** | $494 M | +135% | | **RoTCE** | 16.1% | +970 bps | - End-of-period client investment assets grew **17% year-over-year to $635 billion**, indicating strong client activity and market performance[30](index=30&type=chunk) [U.S. Personal Banking (USPB)](index=10&type=section&id=U.S.%20Personal%20Banking%20(USPB)) U.S. Personal Banking (USPB) generated revenues of $5.1 billion in Q2 2025, a 6% increase year-over-year, with net income surging to $649 million due to lower credit reserve builds USPB Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | **Total Revenues** | $5,119 M | +6% | | - Branded Cards | $2,822 M | +11% | | - Retail Services | $1,649 M | -5% | | - Retail Banking | $648 M | +16% | | **Net Income** | $649 M | +436% | | **RoTCE** | 11.1% | +920 bps | [USPB Metrics](index=11&type=section&id=USPB%20Metrics) Operational metrics for USPB show stable credit performance, with Branded Cards' Net Credit Loss rate at 3.80% and mortgage originations increasing significantly USPB Credit Card Metrics (Q2 2025) | Metric | Branded Cards | Retail Services | | :--- | :--- | :--- | | **New Account Acquisitions (k)** | 1,194 | 2,061 | | **Spend Volume (B)** | $135.8 | $22.9 | | **NCLs as % of avg. loans** | 3.80% | 5.89% | | **90+ days past due as % of EOP loans** | 1.09% | 2.15% | - Mortgage originations showed a strong rebound, increasing **68% sequentially** and **9% year-over-year to $4.7 billion**[39](index=39&type=chunk) [All Other](index=12&type=section&id=All%20Other) The 'All Other' category reported a managed basis loss from continuing operations of $588 million in Q2 2025, a combination of Legacy Franchises and Corporate/Other expenses All Other (Managed Basis) Q2 2025 Performance | Item | Q2 2025 (M) | YoY Change | | :--- | :--- | :--- | | Total Revenues, net | $1,698 | -14% | | Total Operating Expenses | $2,276 | +8% | | **Loss from Cont. Ops** | **($588)** | **-43% (less loss)** | [Legacy Franchises](index=13&type=section&id=Legacy%20Franchises) Legacy Franchises generated net income of $60 million in Q2 2025, a turnaround from a prior-year loss, with ongoing wind-down of Asia Consumer and growth in Banamex - Legacy Franchises reported net income of **$60 million** in Q2 2025, compared to a net loss of **$58 million** in Q2 2024[45](index=45&type=chunk) Legacy Franchises Key Indicators (EOP, vs Q2 2024) | Indicator | Banamex | Asia Consumer | | :--- | :--- | :--- | | **EOP Loans (B)** | $26.8 (+9%) | $3.0 (-46%) | | **EOP Deposits (B)** | $38.4 (+2%) | $1.5 (-82%) | [Corporate/Other](index=14&type=section&id=Corporate%2FOther) Corporate/Other reported a net loss of $627 million in Q2 2025, driven by a 78% year-over-year increase in operating expenses for unallocated costs and treasury activities Corporate/Other Q2 2025 Performance | Item | Q2 2025 (M) | Q2 2024 (M) | | :--- | :--- | :--- | | Total Revenues, net | $7 | $253 | | Total Operating Expenses | $989 | $556 | | **Net Loss** | **($627)** | **($344)** | [Reconciling Items—Divestiture-Related Impacts](index=15&type=section&id=Reconciling%20Items%E2%80%94Divestiture-Related%20Impacts) Divestiture-related impacts resulted in a net loss of $180 million in Q2 2025, primarily due to a pre-tax loss on the Poland consumer banking business sale and Mexico separation costs - Q2 2025 includes a loss of approximately **$186 million** related to the sale of the Poland consumer banking business and **$37 million** in operating expenses for separation costs in Mexico[54](index=54&type=chunk) Divestiture-Related Impacts | Item | Q2 2025 (M) | | :--- | :--- | | Total Revenues, net | ($177) | | Total Operating Expenses | $37 | | **Net Loss** | **($180)** | [Citigroup Supplemental Detail](index=16&type=section&id=Citigroup%20Supplemental%20Detail) [Average Balances and Interest Rates](index=16&type=section&id=Average%20Balances%20and%20Interest%20Rates) For Q2 2025, Citigroup's average interest-earning assets grew to $2.43 trillion, with Net Interest Margin improving to 2.51% due to a favorable rate environment Q2 2025 Average Balances and NIM | Metric | Q2 2025 | | :--- | :--- | | **Average Interest-Earning Assets** | $2,425.3 B | | **Average Interest-Bearing Liabilities** | $1,987.7 B | | **Net Interest Income (Taxable Equiv.)** | $15,203 M | | **Net Interest Margin (NIM)** | 2.51% | [EOP Loans](index=17&type=section&id=EOP%20Loans) Total end-of-period (EOP) loans reached $725.3 billion as of June 30, 2025, up 5% year-over-year, driven by growth in both corporate and consumer portfolios EOP Loans Breakdown (June 30, 2025) | Loan Category | Amount (B) | YoY Change | | :--- | :--- | :--- | | **Corporate Loans** | $329.6 | +9% | | - Services | $96.4 | +8% | | - Markets | $144.3 | +21% | | - Banking | $81.9 | -6% | | **Consumer Loans** | $395.8 | +2% | | - USPB | $220.2 | +5% | | - Wealth | $150.7 | 0% | | **Total Loans** | **$725.3** | **+5%** | [EOP Deposits](index=18&type=section&id=EOP%20Deposits) Total end-of-period (EOP) deposits were $1.36 trillion as of June 30, 2025, a 6% increase year-over-year, primarily driven by institutional businesses EOP Deposits Breakdown (June 30, 2025) | Segment | Amount (B) | YoY Change | | :--- | :--- | :--- | | Services, Markets, and Banking | $891.6 | +10% | | Wealth | $309.9 | -3% | | USPB | $90.5 | +5% | | All Other | $65.7 | -2% | | **Total Deposits** | **$1,357.7** | **+6%** | [Allowance for Credit Losses (ACL) Rollforward](index=19&type=section&id=Allowance%20for%20Credit%20Losses%20(ACL)%20Rollforward) The total Allowance for Credit Losses (ACLL and ACLUC) ended Q2 2025 at $20.8 billion, with a net reserve build of $345 million for loans, primarily in the corporate portfolio ACLL Rollforward YTD 2025 (in millions) | Category | Balance 12/31/24 | Net Build/(Release) YTD | Balance 6/30/25 | | :--- | :--- | :--- | :--- | | Corporate ACLL | $2,556 | $413 | $3,023 | | Consumer ACLL | $16,018 | ($68) | $16,100 | | **Total ACLL** | **$18,574** | **$345** | **$19,123** | - The total allowance for credit losses on loans (ACLL) as a percentage of end-of-period loans was **2.67%** at the end of Q2 2025[74](index=74&type=chunk) - The Q2 2025 rollforward includes a transfer of approximately **$25 million** in ACLL to Other Assets related to the agreement to sell the Poland consumer banking business[78](index=78&type=chunk) [Non-Accrual Assets](index=22&type=section&id=Non-Accrual%20Assets) Total non-accrual loans (NALs) increased to $3.35 billion at the end of Q2 2025, up 49% year-over-year, representing 0.46% of total loans Non-Accrual Loans (June 30, 2025) | Category | Amount (M) | YoY Change | | :--- | :--- | :--- | | Corporate NALs | $1,722 | +73% | | Consumer NALs | $1,632 | +30% | | **Total NALs** | **$3,354** | **+49%** | - Non-accrual loans as a percentage of total loans stood at **0.46%**, an increase of **13 basis points** from Q2 2024[79](index=79&type=chunk) [Capital Ratios and Shareholder Metrics](index=23&type=section&id=CET1%20Capital%20and%20Supplementary%20Leverage%20Ratios%2C%20Tangible%20Common%20Equity%2C%20Book%20Value%20Per%20Share%20and%20Tangible%20Book%20Value%20Per%20Share) As of June 30, 2025, Citigroup maintained a strong capital position with a preliminary CET1 Capital ratio of 13.5% and SLR of 5.5%, with TBVPS increasing to $94.16 Key Capital and Value Metrics (June 30, 2025) | Metric | Value | | :--- | :--- | | **CET1 Capital Ratio** | 13.5% | | **Supplementary Leverage Ratio (SLR)** | 5.5% | | **Book Value per Share** | $106.94 | | **Tangible Book Value per Share (TBVPS)** | $94.16 | - Tangible Common Equity (TCE) increased to **$173.3 billion** from **$167.0 billion** a year ago, while common shares outstanding decreased by **4%** to **1,840.9 million** due to share repurchases[82](index=82&type=chunk)

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

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