Citigroup swings to fourth-quarter profit, tops estimates on investment banking strength

Citigroup shares jumped Wednesday after fourth-quarter earnings beat estimates on the top and bottom lines, reflecting broad strength across the bank.

“2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7 billion and we exceeded our full-year revenue target, including record years in Services, Wealth and U.S. Personal Banking,” CEO Jane Fraser said in a press release.

Shares of the company rose 6.3%.

Here is how the company did relative to LSEG analyst consensus estimates:

• Earnings: $1.34 a share vs $1.22 expected
• Revenue: $19.58 billion vs $19.49 billion expected

Citi posted net income of $2.86 billion, an improvement from a net loss of $1.84 billion a year ago, when its results were hurt by a number of charges Citi booked in the final period of 2023. Revenue was up 12% year over year.

The bank did say it expected its return on tangible common equity to be between 10% and 11% in 2026 as it continues to make investments and reshape its business. That range is below the bank’s previously stated medium-term goal of 11% to 12%.

Fraser called that level “a waypoint, not a destination,” and said it should rise as the company continues to make internal investments.

“As CEO, I want this company set up for long-term success and to ensure that we have enough capacity to invest for that,” Fraser said on a conference call with analysts.

“This level is a waypoint, not a destination. We intend to improve returns well above that level and deliver Citi’s full potential for our shareholders,” Fraser said.

Citi also announced a $20 billion stock buyback. Chief Financial Officer Mark Mason said about $1.5 billion of that should happen during the first quarter.

The bank reported growth across several different business units during the fourth quarter. Investment banking in particular was a bright spot, with revenue jumping 35% year over year to $925 million. Citi said continued momentum in the issuance of investment grade corporate debt helped boost that area of the business. As a result, total banking revenue grew 12%, which expanded to 27% when including the impact of loan hedges.

Markets revenue jumped 36% year over year to $4.58 billion, with both the fixed income and equity businesses growing. Fixed income markets revenue of $3.48 billion was well above the $2.95 billion projected by analysts, according to StreetAccount.

Revenue for the wealth and services units climbed 20% and 15%, respectively, year over year.

Citi’s cost of credit for the quarter was $2.59 billion. That was down from $3.55 billion a year ago, and $2.68 billion in the third quarter. The bank added a net $203 million to its allowance for credit losses, which was also down from prior periods.

Questions from Wall Street analysts on Wednesday’s conference call focused largely on Citi’s expenses and the progress of its turnaround. The company guided for expenses to fall slightly in 2025, which Mason indicated would include about $600 million of costs related to company repositioning.

“We all want transformation to get done quickly, and we want it to get done right. That is why are expenses are temporarily elevated — to make the investments to get there,” Fraser said.

The CEO also said the planned initial public offering of Banamex, Bank of America’s Mexico retail business, may not happen until 2026.

Citi’s stock was a strong performer in 2024, rising nearly 37% on the year. The stock was up more than 4% so far this year entering Wednesday.