Citigroup Inc.

Citi reported second-quarter net income of $5.8 billion, EPS of $3.15, ROTCE of 13%, and revenues of $24.8 billion. Total revenues were up 14% year over year, NII excluding markets was up 6%, non-interest revenues excluding markets were up 39%, and markets revenues were up 17%. Expenses were $14.2 billion, up 5%, with an efficiency ratio below 58%; cost of credit was $2.5 billion, driven mainly by U.S. consumer cards and a firmwide ACL build of $118 million. For the year-to-date period, revenues were up 14%, expenses were up 6%, and ROTCE was 13.1%. Guidance: Citi reiterated a full-year 2026 ROTCE target of 10% to 11%, expects NII ex-markets growth of approximately 5% to 6%, expects full-year efficiency around 60%, and still expects U.S. consumer cards net credit losses to run between 4% and 4.5%; it also said U.S. consumer cards NIR should remain around the second quarter’s absolute level in Q3 and Q4.

Jane Fraser framed the quarter as evidence that Citi’s strategy is working, saying the firm is in a “new growth mode” with improved returns and more durable results. She highlighted broad-based momentum across Services, Markets, Banking, and Wealth, while noting that the firm will keep investing in talent, technology, and client coverage if the backdrop remains constructive. Her tone was confident and forward-looking, but she repeatedly stressed discipline, the long game, and the goal of higher sustainable returns.

Gonzalo Lucchetti emphasized that the quarter showed operating leverage despite higher spending, with expenses of $14.2 billion up 5% against 14% revenue growth and an efficiency ratio below 58%. He cited 12.8% CET1, $2.9 trillion of assets, a $1.5 trillion deposit base, a 114% average LCR, over $1 trillion of available liquidity, and $4 billion of buybacks in the quarter. He also noted $800 million of severance year to date, over $22 billion in total reserves, and a year-to-date DTA reduction of $500 million, while saying additional severance or funding actions could be taken in the second half if opportunities arise.

Analysts pressed management on why Citi did not raise its return target after a 13% first-half ROTCE, and whether the company was implicitly signaling a weaker second half. Fraser and Lucchetti said no; they pointed to seasonality, macro uncertainty, and the opportunity to redeploy strong results into investments that improve medium-term returns. Questions also focused on severance, capital buffers, and the DTA path; management said the 100 basis point buffer remains appropriate for now, that more severance could be taken to accelerate structural efficiencies, and that the DTA burn-down was $500 million year to date versus an $800 million full-year target.