In the second quarter of 2025, Citigroup demonstrated a robust financial performance, achieving a net income of $4 billion and an 8% increase in total revenues. The bank's strategic execution led to positive operating leverage across all its business segments, underscoring a period of consistent growth and operational efficiency. A significant focus was placed on enhancing profitability and shareholder returns, with strong results in areas like Markets and Banking, and sustained momentum in its Services division. These positive trends reinforce Citigroup's commitment to its long-term financial objectives, including a targeted 10%-11% return on tangible common equity (ROTCE) for the upcoming year.
The comprehensive review of Citigroup's second-quarter performance, presented by CEO Jane Fraser and CFO Mark Mason, revealed several key drivers of success. The Services segment, described as a 'crown jewel,' recorded an impressive 23.3% ROTCE, fueled by growth in both loans and deposits, and notable increases in cross-border transactions and U.S. dollar clearing. Markets revenues surged by 16%, marking its strongest second quarter since 2020, with fixed income up 20% and equities rising 6%. Banking revenues also saw an 18% increase year-over-year, supported by significant advisory roles in landmark transactions, including Boeing’s asset sale and Nippon Steel’s acquisition of U.S. Steel.
Wealth Management revenues experienced a substantial 20% growth, with client investment assets expanding by 17%. The U.S. Personal Banking (USPB) division saw revenues rise by 6%, primarily due to an 11% increase in branded cards revenue and a 16% growth in retail banking. Despite an overall 2% increase in expenses, largely attributed to higher compensation and severance costs, these were partially offset by reduced tax and insurance expenses, and the absence of prior penalties. Year-to-date expenses for 2025 were down 1%, reflecting effective cost management.
Citigroup's capital position remained robust, with a Common Equity Tier 1 (CET1) ratio of 13.5%, significantly above the 12.1% regulatory requirement. The bank returned over $3 billion to shareholders in Q2 2025, including $2 billion in share repurchases, with plans to repurchase at least $4 billion in Q3 2025 as part of a larger $20 billion program. The quarterly dividend is set to increase to $0.60 per share in Q3 2025, reflecting confidence in sustained profitability and capital generation. Management also highlighted ongoing investments in digital assets, particularly Citi Token Services, which is operational in four major markets and has processed billions in transactions, aiming to modernize infrastructure and enhance client services.
Looking ahead, Citigroup anticipates full-year 2025 revenue to reach the higher end of its guidance, around $84 billion, with net interest income (excluding markets) expected to grow by nearly 4%. Expenses are projected to be approximately $53.4 billion, with the flexibility to adjust based on revenue performance. The company’s focus on disciplined risk-weighted asset allocation and continuous improvement in all segments positions it well to exceed its 10%-11% ROTCE target beyond 2026. The strategic divestment of international consumer businesses, with Banamex's IPO on track, further streamlines operations and concentrates efforts on high-margin activities.
The firm's commitment to its transformation program is evident, with most initiatives at or near their target state, leading to expected decreases in associated expenses from 2026 onwards. Significant progress has been made in improving the risk and control environment, leveraging technology and AI to streamline processes and enhance data quality. This diligent approach to operational efficiency, coupled with strategic investments in talent and innovation, supports Citigroup’s long-term vision of sustained growth and value creation for its shareholders.
Overall, Citigroup's second-quarter results underscore a strategic pivot towards a more focused and high-performing business model. The leadership's confidence in achieving ambitious financial targets is rooted in strong operational performance, prudent capital management, and a forward-looking approach to market opportunities, particularly in the evolving digital asset landscape. The bank's consistent positive operating leverage and disciplined expense control signal a strong trajectory for future returns and continued shareholder value.