- Citigroup shares surged about 70% in 2025 and started 2026 trading above book value for the first time since 2008 as Jane Fraser’s restructuring gains traction.
- Results show improving profitability, with strong fee growth in investment banking, wealth and services and sharply lower expenses.
- Analysts forecast roughly 10–11% ROTCE by 2026, helped by ongoing simplification, capital returns and regulatory easing.
- Upside still hinges on execution and clean exits from weaker businesses, with Citi’s valuation discount and past control lapses remaining key risks.
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Citigroup appears to be in the midst of a credible turnaround, led by Jane Fraser, that is being increasingly rewarded by investors and analysts. After years of underperformance and regulatory scrutiny, the bank’s recent results indicate that its reform agenda—simplifying operations, shedding low-return or non-core overseas consumer businesses, overhauling risk and controls, and refocusing on fee-heavy and capital markets businesses—is beginning to pay off. Trading above book value in early 2026 and generating strong share gains in 2025 (approx. 70%) underscore increasing market confidence.
Financial metrics are coherent with the narrative. For Q4 2024, Citigroup posted revenue of ~$19.6 billion (up ~12% YoY), diluted EPS of $1.34 (vs ~$1.22 consensus), and net income of ~$2.9 billion (vs loss in Q4 2023). Fee revenue, investment banking, wealth & services divisions showed significant growth, while expenses dropped meaningfully.
Looking forward to 2026, analysts expect a ROTCE of 10–11%, with possibilities for higher returns as cost reductions continue, capital is liberated from business exits, and regulatory burdens lighten. Returns are nonetheless modest versus earlier targets (11–12%), reflecting caution in the face of execution risk, regulatory history, and peer valuation gaps.
Strategic enablers are evident: a simpler organizational structure (new reportable segments, management layer cuts), ~20,000 job reductions over two years, the planned exit or IPO of Banamex, and entering markets with high-return potential (wealtℎ, capital markets, TTS, etc.). At the same time, regulatory tailwinds—such as recent easing by the OCC of specific compliance requirements—are reinforcing investor confidence.
Risks remain. Past missteps include the Banamex accounting loss, compliance fines (e.g., Revlon mispayment), and issues around the “living will” plan in the U.K. Moreover, while ROTCE guidance is improving, valuation still lags peers; investors may have already priced in much of the upside. Execution against ambitious cost-cutting goals, successful exits from non-core units, and delivery in fee-intensive businesses will be critical.
Supporting Notes
- Citigroup shares gained approximately 70% in 2025 and is trading above book value for the first time since 2008.
- Analysts expect 10–11% ROTCE by end of 2026.
- Q4 2024 revenue of ~$19.6 billion, up ~12% YoY; EPS of $1.34 beating expectations vs ~$1.22.
- Net income turned positive: ~$2.86–2.9 billion in Q4 2024 from a loss of ~$1.84 billion a year before.
- Strong non-interest income growth: investment banking revenues up ~35–38% YoY; wealth and services also up significantly.
- Operating expenses declined by ~18% YoY to ~$13.2 billion in Q4 2024, driven by simplification, exiting overseas consumer units, and reducing stranded costs.
- Expectations for full-year 2025 revenues between $83.5–84.5 billion; expenses slightly lower than ~$53.8 billion; net interest income (excluding Markets) modestly up.
- Regulatory relief: in December 2025, OCC terminated the 2024 amendment requiring a resource review tied to dividends, reflecting progress in risk/data control.
- Valuation: trades at roughly 9× estimated 2026 earnings; tangible book value per share around $94, still undervalued relative to peers.