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Citigroup (C) delivered a strong 2Q25, easily surpassing EPS and revenue expectations while nudging its FY25 revenue guidance higher to approximately $84 bln from its prior forecast of $83.1-$84.1 bln. The 29% yr/yr EPS growth was driven by a 12% increase in net interest income, fueled by 5% loan growth to $725.3 bln and disciplined cost containment, with operating expenses rising just 2% to $13.6 bln, reflecting positive operating leverage across all five business segments for the fourth consecutive quarter.

• The Markets segment was a standout, generating $5.9 bln in revenue, a 16% yr/yr increase, propelled by strength in both Fixed Income and Equity markets. Fixed Income, Currencies, and Commodities (FICC) sales and trading revenue surged 20% to $4.3 bln, driven by heightened client activity amid volatile U.S. equities markets. Equity markets revenue grew 6% to $1.61 bln, supported by strong performance in derivatives and prime brokerage, reflecting Citigroup’s ability to capitalize on favorable market conditions.
• This robust trading performance bodes well for peers like Goldman Sachs (GS) and Morgan Stanley (MS), which rely heavily on their trading desks for revenue, suggesting potential strength in their upcoming earnings reports set for tomorrow morning, given similar market dynamics.
• The Banking segment also performed strongly, with revenue climbing 18% to $1.92 bln, exceeding estimates of $1.65 bln. Investment banking revenue led the charge, rising 15% to $981 mln, fueled by a 52% surge in advisory revenue from increased mergers and acquisitions activity and a rebound in equity capital markets, which benefited from a revival in initial public offerings after a three-year slowdown.
• This performance stands in contrast to Jefferies (JEF), which reported weakness in its equity underwriting business in Q2, highlighting Citigroup’s competitive edge in navigating a recovering dealmaking environment. The segment’s growth underscores the success of CEO Jane Fraser’s strategy to streamline operations and focus on high-return activities like advisory and capital markets.
• In the consumer-facing U.S. Personal Banking (USPB) segment, revenue grew 6% to $5.12 bln, slightly below estimates, but driven by an 11% increase in Branded Cards revenue to approximately $2.8 bln. This growth was fueled by a 9% rise in card spend volumes and a 15% increase in average loans, reflecting strong consumer engagement and continued normalization of payment rates. Retail Banking revenue rose 16% to approximately $700 mln, propelled by higher deposit spreads achieved through strategic pricing adjustments that capitalized on elevated interest rates, allowing Citigroup to offer competitive yields on deposits while maintaining profitability.
• The Wealth segment continued its stellar performance, with revenue surging 20% to $2.2 bln, marking it as the fastest-growing segment in Q2. This growth was driven by an organic increase in client investment balances, as Wealth clients shifted assets to higher-yielding fixed income products on Citigroup’s platform, alongside strong new client acquisition in segments like Wealth at Work and the Private Bank, which maintained a 29% EBT margin.

Citigroup’s Q2 earnings demonstrate robust growth across all segments, a stark improvement from the challenges faced a couple of years ago. With Markets, Banking, USPB, and Wealth each delivering strong revenue gains and operating expenses tightly controlled, the company appears to be firing on all cylinders.