Citigroup's NII Rises Y/Y in 1H25: Will This Momentum Continue?

Core Insights - Citigroup, Inc. is showing resilience and steady growth in its core banking operations, with net interest income (NII) increasing by 8% year over year to $29.2 million in the first half of 2025, driven by higher average deposit and loan balances, as well as improved deposit spreads [1][9] - The outlook for Citigroup's NII remains favorable, supported by a stable interest rate environment and solid balance sheet trends, with expectations for interest rates to hold steady in the near term [2][3] - Citigroup's management has raised its 2025 NII guidance to a growth of 4% year over year, up from a previous estimate of 2-3%, with 2024's NII reported at $54.9 billion [4][9] Comparative Analysis - Bank of America (BAC) has also seen a rise in NII, which increased by 4.9% year over year to $29.1 million in the first half of 2025, driven by strong loan demand and higher interest rates [5] - In contrast, Wells Fargo (WFC) experienced a decline in NII, which dropped nearly 4% year over year to $23.2 billion in the first half of 2025, primarily due to lower interest rates affecting floating-rate assets [6] Performance Metrics - Citigroup's shares have gained 33.9% year to date, outperforming the industry's growth of 21.8% [7] - The Zacks Consensus Estimate for Citigroup's earnings in 2025 and 2026 implies year-over-year increases of 27.4% and 27.7%, respectively, with upward revisions in estimates over the past 30 days [12] - Citigroup trades at a forward price-to-earnings (P/E) ratio of 10.43X, which is below the industry's average of 14.33X, indicating potential undervaluation [15]