This news is developing. Please check back here for updates.
Citigroup is making progress on its yearslong business overhaul, but on Wednesday the megabank warned it may take longer than planned to achieve certain profitability targets.
Revenues for 2024 exceeded the company's forecast, net income rose 37% from the prior year and three of its five core businesses — services, wealth and U.S. personal banking — pulled in a record level of revenues, CEO Jane Fraser said in a press release.
In addition, Citi achieved positive operating leverage companywide and within each of the five businesses, and returned $7 billion in capital to shareholders through dividends and buybacks.
And it just announced a new $20 billion share-repurchase plan that's expected to kick off in the first quarter, with an initial $1.5 billion of buybacks. The board approved the plan on Monday.
But when it comes to return on tangible common equity, a key profitability metric that analysts and investors have been closely monitoring for years, Citi lowered its near-term expectations. The $2.4 trillion-asset bank said it is now projecting an ROTCE of 10% to 11% in 2026, down from 11% to 12%, as it continues to invest in its businesses and make improvements to its risk management compliance and internal controls systems, which have had longstanding issues.
Still, "this level is a waypoint, not a destination," Fraser said in the release.
"We intend to improve returns well above that level and deliver Citi's full potential for our shareholders," she said.
The revised ROTCE forecast for 2026 is still better than some analysts' expectations. Saul Martinez, an analyst at HSBC, called for 9.8% in a research note Wednesday.
Full-year ROTCE was 7%, an improvement from 2023's 4.9%.
During the fourth quarter, revenues climbed 12% year-over-year while expenses fell 18% and the cost of credit tumbled 27%. As a result, Citi's net income was $2.9 billion for the three-month period compared with a loss of $1.8 billion that was recorded during the same quarter in 2023.
For the full year, Citi's revenues totaled $81.1 billion, slightly exceeding the company's forecast of $80 billion to $81 billion. But expenses, which were $54 billion for all of 2024, came in higher than the company had been projecting — which had been in the range of $53.5 billion to $53.8 billion.
Earnings per share totaled $1.34 for the quarter, up from a loss of $1.16 from the year-ago period. Analysts polled by S&P Capital IQ had expected earnings per share of $1.22.
The company expects 2025 revenues of $83.5 billion to $84.5 billion. Expenses, meanwhile, are expected to be "slightly lower" than $53.8 billion, Citi said.
The company has long been criticized for its lagging financial performance and its complexity. CEO Jane Fraser is pushing through Citigroup's most recent transformation plan, but will she succeed where her predecessors have failed?
The company did not put a hard number on anticipated ROTCE this year, saying only that it is projected to be higher than the 7% recorded for 2024.
In recent months, Citigroup has continued to make progress on its business simplification efforts, which have largely been focused on selling or winding down retail franchises in 14 overseas markets. In early December, the company completed the separation of its institutional banking business in Mexico from its consumer, small and middle market businesses.
Citi now operates two separate financial groups in Mexico: Grupo Financiero Citi México and Grupo Financiero Banamex. It plans to conduct an initial public offering of Grupo Financiero Banamex, the timing of which will depend on regulatory approvals and market conditions.
Meanwhile, Citi continues to address deficiencies in its risk management and internal controls programs. Those areas have been the subject of tremendous focus since the fall of 2020, when regulators slapped the firm with two consent orders and a $400 million civil penalty.
About six months ago, the Federal Reserve and the Office of the Comptroller of the Currency ordered Citi to pay an additional $135 million of penalties, saying the company's data quality management improvements were moving too slowly. In October, analysts asked Fraser if Citi is operating under an asset-growth cap or expects to be saddled with such a cap anytime soon.
Fraser, who has beenCiti'sCEO since 2021, responded: "Let me be crystal clear: We do not have an asset cap and there are no additional measures, other than what was announced in July, in place and [we are] not expecting any."
The Supreme Court heard oral arguments in Thompson v. United States, which could decide whether the federal government can prosecute "misleading" in addition to "false" statements to the Federal Deposit Insurance Corp.
Lawsuits challenging the Consumer Financial Protection Bureau's final rule on medical debt are the latest issues facing banks ahead of Donald Trump's return.
Consumers showed great interest for both purchases and refinances in the first holiday-free week of the year, breaking the cold streak that closed 2024.
The megabank reported achievements in several areas, but lowered its 2026 expectations for a profitability metric that investors have been closely watching.
The megabank saw $5.1 billion in profits in its fourth quarter, as higher fees from investment banking and wealth management offset weaker interest income on loans.
