Citi Logs Best Returns in Five Years as Revamp Takes Hold

Herman Chan, Bloomberg Intelligence Senior US Banks Analyst, reacts to the morning's bank earnings including JPMorgan, Wells Fargo, and Citi.

Citigroup Inc. traders rode a wave of volatility to push the Wall Street bank to its highest quarterly revenue in a decade, notching another success for Chief Executive Officer Jane Fraser’s turnaround plan.

The fixed-income unit, Wall Street’s second largest, generated $5.2 billion of revenue in the first quarter, a 13% jump from a year earlier, Citigroup said in a statement Tuesday. The much smaller equities business hauled in a record $2.1 billion, a 39% increase. Together, the teams reported the company’s highest quarterly trading haul since at least the financial crisis.

Shares climbed 2.4% to $129.35 in pre-market trading at 8:20 a.m. in New York Tuesday.

The bank reported its highest quarterly return on tangible common equity in five years and said it was about 90% of the way to completing the programs it established to fix back-office and regulatory-reporting problems. Those have been the target of penalties imposed by banking regulators since 2020.

Citigroup’s banking division, led by Vis Raghavan, was the only one of the firm’s five units that failed to deliver positive operating leverage. Fees rose 12% from a year earlier to $1.23 billion, short of the $1.27 billion average estimate of analysts surveyed by Bloomberg. That came on the heels of a blowout fourth quarter, when its fees from handling mergers and acquisitions surged.

Overall, net income increased 42% to $5.8 billion, or $3.06 a share, beating the $2.66 average estimate of analysts. Revenue of $24.6 billion also topped Wall Street predictions.

The results represent another milestone for Fraser, whose firm has long been a Wall Street laggard. Citigroup shares climbed 8.2% this year through Monday, the most among the six biggest US banks. Overall, net income increased 42% to $5.8 billion, or $3.06 a share, beating the $2.66 average estimate of analysts. Revenue of $24.6 billion also topped Wall Street predictions.

The company is set to host an investor day in early May, when it’s expected to update its financial targets. It previously forecast that return on tangible common equity, a key measure of profitability, would reach 10% to 11% for this year. It hit 13.1% in the first quarter, up from 9.1% from a year earlier.

The company’s facing higher expenses, with costs jumping 7% from a year earlier.

Citigroup said it bought back $6.3 billion of shares in the first quarter. The bank expects buybacks to be higher this year than in 2025, according to the firm’s presentation.

Citigroup’s fixed-income results contrast with those of Goldman Sachs Group Inc.’s, which fell 10% and missed Wall Street estimates.

Read More: Goldman’s Bond Desk Falls Short, Outweighing Stock Record

Revenue at Citigroup’s consumer credit-card business, now a separate unit, reported a 4% increase in revenue amid higher customer spending and an increase in new accounts. Still, the bank said in a presentation that it boosted its provision for credit losses, citing “increased uncertainty in the macroeconomic outlook.”

First-quarter revenue at Citigroup’s services business, a global money-moving juggernaut for corporates and governments, jumped 17% to $6.1 billion.

The wealth business, which now includes the retail bank, reported an 11% increase in revenues. Last month, Bloomberg reported that bank executives had weighed buying another bank or wealth brokerage.

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