Citigroup Q3 Net Income Surges 40% to $5.25 Billion on Decade-High Revenue, Stock Falls 5%

Citigroup posted its best third-quarter revenue in at least a decade on October 13, with net income rising 40% year over year to $5.25 billion, or $2.85 per share, beating the consensus estimate of $2.65 by $0.20. Total revenue came in at $23.85 billion against an estimate of $23.72 billion, an 8% gain from the prior-year quarter, driven by broad strength across trading, services, wealth management, and investment banking.

Fixed-income trading was a standout, generating $4.39 billion against an estimate of $4.26 billion, marking the division's best Q3 performance in at least a decade. Markets revenue overall reached $6.11 billion, ahead of the $6.04 billion estimate and up 6% year over year, though equities trading came in slightly below expectations at $1.73 billion versus a $1.78 billion estimate. Services revenue rose 15% to $6.6 billion, wealth revenue climbed 15% to $3.27 billion, and investment banking contributed $1.35 billion, up 9% year over year. US consumer cards revenue of $4.66 billion was flat year over year and missed the $4.75 billion estimate. Net interest income reached $16.98 billion, topping the $16.64 billion forecast.

Return on tangible common equity improved 350 basis points to 11.5%, and return on equity rose 300 basis points to 10.1%. The CET1 ratio held at 12.8%, average loans grew 12% to $809 billion, and end-of-period deposits rose 9% to roughly $1.5 trillion. Citigroup returned approximately $4.1 billion to shareholders in the quarter, an 85% payout ratio. The bank said it expects to exceed its full-year 2026 return target and guided for RoTCE above 11% with an efficiency ratio below 60%.

Despite the beat, Citigroup shares fell roughly 5%, their steepest single-day drop since July, as investors sold into the results. CFO Gonzalo Luchetti flagged that investment banking revenue fell 13% sequentially after a record first half, signaling that the deal-making surge is cooling. CEO Jane Fraser framed the quarter as part of a broader repositioning toward what she called an AI-driven future. Separately, Citi downgraded its stance on US equities to neutral from overweight, closing its long position in the S&P 500 Equal Weight index, citing stretched market sentiment and signs of exuberance.