Citigroup beat estimates for third-quarter profit, which rose as all of its divisions brought in record revenue, despite booking a loss from selling a stake in its Mexico unit.
Citibank, like its competitors, benefited from a deals rebound as companies struck megadeals, despite uncertainty over U.S. President Donald Trump’s tariff policies. The banking division had the highest revenue growth among the units, 34 per cent from a year earlier.
Citi CEO Jane Fraser said in a statement that restructuring in recent years has “put Citi in a materially different place in terms of our ability to compete.” Citigroup shares rose 1.3 per cent.
The surging profits came despite Citi booking a US$726 million loss from the sale of a 25 per cent stake in its Mexican subsidiary Banamex.
Adjusted earnings per share excluding this loss were $2.24 per share against the $1.90 consensus from analysts, according to LSEG.
Markets revenue rose 15 per cent to $5.6 billion in the quarter, helped by a strong performance in equities and fixed income. A rate cut in September and hopes of further easing this year could help banks by spurring economic activity and demand from borrowers.
Citigroup Chief Financial Officer Mark Mason told reporters that high stock valuations have left sectors “frothy and overvalued.”
Credit costs
Delinquent corporate loans more than doubled in the quarter compared to a year earlier, to $2.1 billion. Mason said the higher non-accrual loans were related to two downgrades of clients in its corporate portfolio.
He added the bank did not lose in the recent bankruptcies of auto parts supplier First Brands and auto finance company Tricolor. Mason said the bank has not seen worrying signs of distress in either its corporate or consumer credit portfolios.
Citi’s return on tangible common equity, a measure of how well it uses its capital to earn profit, was eight per cent in the quarter and 8.6 per cent so far this year. Excluding the one-off loss in the quarter, ROTCE was 9.7 per cent, closer to the target set by Fraser of 10 per cent to 11 per cent for next year.
Mason said the bank expects a lower minimum capital requirement after the Basel III endgame and other regulatory revisions are completed. The CFO said Citi is making progress in improving the quality of its regulatory reporting data.
Peers JPMorgan Chase and Wells Fargo also reported higher third-quarter profits on Tuesday, buoyed by investment banking.
Citi’s shares have gained 36.5 per cent in 2025, compared with increases of 28.5 per cent for JPMorgan and 12.4 per cent for Wells Fargo. Citi is recovering lost ground, as the bank has the lowest share price among its peers compared to its book value. The KBW banking index .BKX is up nearly 15 per cent year to date.
Mexico sale
Citi announced last month it would sell a 25 per cent stake in its retail unit Banamex to Mexican billionaire Fernando Chico Pardo, chairman of airport operator ASUR, for around $2.3 billion. The bank plans to list the Mexico business to divest from the rest of the stake and rejected last week an unsolicited offer by Mexican mining and transport conglomerate Grupo Mexico.
(Reporting by Tatiana Bautzer in New York and Pritam Biswas in Bengaluru, editing by Lananh Nguyen, Shinjini Ganguli, Bernadette Baum, Rod Nickel)
