This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Citigroup offers financial products and services globally to retail customers, businesses, governments, and investors through five business lines: services, markets, banking and international, wealth, and U.S. personal banking. In 2026, it is the third-largest bank by revenue in the U.S. behind Bank of America and JPMorgan Chase.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

GLOBAL-500-2023-Citi-Group

The 300 companies on this list are transforming industries from the inside out.

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Modern Board 2023-Citigroup

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Fortune Modern Board 25

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F500-2023-036.-Citigroup

The third-largest commercial bank in the U.S. jumped eight spots on this year’s list as the company posted impressive revenue growth even with rising interest rates rattling the banking sector. 
<ul> 
 	<li>The bank posted an eye-popping $101 billion in revenue this year, up 27% from the year prior.</li> 
 	<li>The company reported a profit of $14.8 billion for 2022, down 32% from the year prior largely because of rising interest rates.</li> 
 	<li>In 2023, the bank’s first-quarter revenue from its Asia Wealth division grew 20%, boosted by investment gains and new regional clients.</li> 
</ul>

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Modern Boards 2022 Citigroup

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F500 2022-Citigroup

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G500-2021-082-Citigroup

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F500-2021-33-Citigroup

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This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-070-Citigroup

Citigroup shareholders were richly rewarded in 2019 as shares soared a stellar 53%. Those returns come as Citi has rejiggered its business, eliminating hundreds of positions in its trading division as it has invested more deeply in providing banking services to corporations. Long considered second fiddle to the likes of Morgan Stanley and Goldman Sachs in the realm of investment banking, the consumer-facing giant also beefed up its roster of well-connected bankers in that space, as it vies for a top-three spot in the league tables. Under the hood, Citi reshuffled its executive team in 2019, elevating Jane Fraser to the No. 2 spot in management and the leader of its consumer banking business—and positioning her as a strong contender to be the first woman to eventually run a major Wall Street bank.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-031-Citigroup

Citigroup shareholders were richly rewarded in 2019 as shares soared a stellar 53%. Those returns come as Citi has rejiggered its business, eliminating hundreds of positions in its trading division while investing more deeply in providing banking services to corporations. Long considered second-fiddle to the likes of Morgan Stanley and Goldman Sachs in the realm of investment banking, the consumer-facing giant also beefed up its roster of well-connected bankers in that space, as it vies for a top-three spot in the league tables. Under the hood, Citi reshuffled its executive team in 2019, elevating Jane Fraser to the No. 2 spot in management and the leader of its consumer banking business—and positioning her as a strong contender to be the first woman to eventually run a major Wall Street bank.

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This year's Fortune 500 marks the 65th running of the list.

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This year's Fortune 500 marks the 64th running of the list.

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This year's Fortune 500 marks the 63rd running of the list.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Citigroup offers financial products and services globally to retail customers, businesses, governments, and investors through five business lines: services, markets, banking and international, wealth, and U.S. consumer cards.

Q2 2026

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Citigroup (C): Company Profile, Stock Price, News, Rankings

legacy

Citigroup

citigroup

Hello, and welcome to Citi's Second Quarter twenty twenty five Earnings Call. Today's call will be hosted by Jen Landis, Head of Citi Investor Relations. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Landis, you may begin.

Thank you, operator. Good morning, and thank you all for joining our second quarter twenty twenty five earnings call. I'm joined today by our Chief Executive Officer, Jane Fraser and our Chief Financial Officer, Mark Mason. I'd like to remind you that today's presentation, which is available for download on our website, citigroup.com, may contain forward looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors, including those described in our earnings materials as well as in our SEC filings. And with that, I'll turn it over to Jane.

Thank you, Jen, and a very good morning to everyone. This morning, we reported another very good quarter with net income of $4,000,000,000 and earnings per share of $1.96 with an ROTCE of 8.7%. Revenues were up eight percent and three of our five businesses had record second quarter revenues. We again had positive operating leverage at each business and the group level. We continue to demonstrate that our strong performance is sustainable through different environments.

In April, I'd said that we were ready to lean in despite the lack of clarity of the moment, and indeed, we have. We are executing our strategy with discipline and intensity. We're improving the performance and returns of each of our businesses whilst advancing their strategic positions and share. And we are making significant progress on our transformation. Turning to our five businesses, services continues to show why this high returning business with 23% ROTCE for the quarter is our crown jewel.

Revenue is up 8% with robust growth in both loans and deposits. Underlying fee drivers such as cross border activity and US dollar clearing grew nicely, and we grew our AUCA to over $28,000,000,000,000 Markets revenues were up 16%, the best second quarter since 2020. In fixed income, the flows we saw in rates and currencies were particularly strong backed by client momentum, including hedging activity as well as improved monetization. Equities had the best second quarter ever as our prime balances hit a record. With sentiment improving significantly as the quarter progressed, banking revenues were up 18%.

We continue to be at the center of some of the most significant transactions, including serving as the exclusive adviser to Boeing on the $11,000,000,000 sale of Jefferson and as lead adviser to Nippon Steel on their $15,000,000,000 acquisition of US Steel. Halfway through the year, we have been involved in seven of the top 10 investment banking fee events. In addition to the sustained momentum in M and A, we continue to take share in leveraged finance and with sponsors, a priority area. We also took share in equity capital markets with convertibles fueling a strong quarter. Wealth delivered a pretax margin of 29% as revenues were up 20% with each line of business growing significantly and non interest revenue up 17%.

Whilst we have had 9% organic growth over the last year in net new investment assets, we did see inflows slow this quarter as clients were cautious amid macro uncertainty. We are confident we will see a pickup here as markets have recovered. In USPB, we grew revenues by 6% as we continue to focus on product innovation, digital capabilities and the customer experience. We saw significant growth in branded cards plus retail services was pressured by lower sales activity at our partners. And we continue to feel good about the quality and the mix of our portfolio as well as our healthy level of reserves.

And retail banking had a very good quarter underpinned by improving deposit spreads. During the quarter, we returned over $3,000,000,000 in capital to our common shareholders, which includes $2,000,000,000 in share repurchases. On a year to date basis, we repurchased $3,750,000,000 of shares as part of our $20,000,000,000 repurchase plan. We ended the quarter at a common equity tier one capital ratio of 13.5%, a 140 bps above our current regulatory requirement.

We were pleased with the results of our recent stress test. We are well positioned to continue to increase the return of capital to our shareholders through buybacks, which is a priority for us, as well as an increased dividend of $0.60 per share beginning in the third quarter. The results of the recent stress test also show how we have derisked the company by implementing a more focused business model, which includes divesting our international consumer businesses with Poland, our last remaining sale expected to close next year. I am particularly pleased that the momentum across our franchise includes the transformation as well. The investments we have made are improving our risk and control environment. Many of our programs are at or near target state and we are making good progress in the remaining areas.

We continue to focus on streamlining processes and platforms and driving automation to reduce manual touch points. We're also increasingly deploying AI tools to support these efforts in areas such as data quality, and we remain on track with our data plan. And as all of this work progresses, we are confident that our transformation expenses will start to decrease next year. But transformation is hardly the only recipient of investment. We continue to make investments that enhance the competitiveness of our businesses.

For example, we aim to deliver the benefits of advancements in stablecoin and digital assets to our clients in a safe and sound manner by modernizing our own infrastructure and improving efficiency, transparency, and interoperability for our clients. As a leading global bank in the space, we are laser focused on innovations which enable clients to access real time twenty four seven payments, clearing, and settlement across borders and across currencies. Citi Token Services, our leading digital asset solution, is now live in four major markets with more to come and has processed billions of dollars of transactions since its launch. In markets, investments in our trading platforms have allowed us to handle record volumes with ease. In wealth, our partnership with iCapital will provide an end to end solution for our alternative investment offerings. As you saw with the American Airlines extension and the refreshed Costco Anywhere Visa card, we're investing in our cards portfolio to deliver more value for our cardholders.

And later this quarter, we will introduce a new proprietary premium credit card, Citi Strata Elite, to our rewards family of products to expand our offering for affluent customers. In terms of investing in talent, our momentum and value proposition continue to attract great leaders to the firm, as you've seen recently in banking and wealth. Just as importantly, we are giving our talent the tools and the resources to compete and to win. Now let's turn to the environment. Well, it's proven to be more resilient than most of us anticipated, but we aren't dropping our guard as we begin the second half of the year.

We expect to see goods prices to start ticking up over the summer as tariffs take effect, and we have seen pauses in CapEx and hiring amongst our client base. All of that said, the strength of The US economy driven by the American entrepreneur and a healthy consumer has certainly been exceeding expectations of late. As I've been speaking to CEOs, I've yet again been impressed by the adaptability of our private sector aided by the depth and breadth of the American capital markets. I believe our results over the past year will help you see why we have been so confident in our trajectory. Our people have been performing with excellence in an unpredictable macro environment, and I am so proud of them.

The need for what we can uniquely provide for clients remains in very high demand, and we will continue to deliver for them through our one city approach through the second half of the year and beyond. Our wealth business is now starting to truly benefit from not only our retail bank, but our global network. By aligning client coverage and deploying credit more strategically, we're deepening relationships with asset managers and private market clients across services, markets, banking, and wealth. Importantly, we are gaining share of mind as well as share of wallet. We will remain relentlessly focused on execution.

As I've said, next year's 10 to 11% ROTCE target, it's a waypoint. It's not a destination. The actions we have taken have set up Citi to succeed long term, drive returns above that level, and continue to create value for shareholders. With that, I will turn it over to Mark and then we will be happy to take your questions.

Thanks Jane and good morning everyone. I'm going to start with the firm wide financial results focusing on year over year comparisons unless I indicate otherwise and then review the performance of our businesses in greater detail. On Slide six, we show financial results for the full firm. This quarter, we reported net income of $4,000,000,000 EPS of 1.96 and an ROTCE of 8.7% on $21,700,000,000 of revenue, generating positive operating leverage for the firm and each of our five businesses. Total revenues were up 8% driven by growth in each of our businesses, partially offset by a decline in all other.

Net interest income excluding markets, which you can see on the bottom left side of the slide, was up 7% driven by services, USPB and wealth, partially offset by a decline in corporate other. Non interest revenues, excluding markets, were up 1% as better results in banking and wealth were offset by declines in legacy franchises and USPB. And total markets revenues were up 16%. Expenses of $13,600,000,000 were up 2%. Cost of credit was $2,900,000,000 primarily consisting of net credit losses in U.

S. Card as well as a firm wide net ACL build driven by services, banking, and legacy franchise. Looking at the firm on a year to date basis, total revenues were up 5% driven by growth in each of our five businesses partially offset by a decline in all other. And expenses were down 1% as we generated positive operating leverage for the firm and each of our five businesses and reported an ROTCE of 8.9%. On slide seven, we show the expense trend over the past five quarters.

The expense increase this quarter was driven by higher compensation and benefits, largely offset by lower tax and deposit insurance costs as well as the absence of civil money penalties in the prior year. The increase in compensation and benefits was driven by higher severance, primarily related to the realignment of our technology workforce, volume and other revenue related expenses, and investments in transformation and technology, with productivity and stranded cost reduction partially offsetting continued growth in the businesses. As we've said in the past, we are very focused on bringing down our expense base through reduction of stranded costs and productivity savings, both of which allow us to self fund our additional investments in transformation, technology, and the businesses. On Slide eight, we show key consumer and corporate credit metrics. At the end of the quarter, we had $23,700,000,000 in total reserves with a reserve to funded loan ratio of 2.7%. Approximately 85% of our card portfolio is to consumers with FICO scores of six sixty or higher and our reserve to funded loan ratio in the card portfolio was 8%. And it's worth noting that we are seeing an improvement in our card credit trend.

Looking at the right hand side of the slide, you can see that approximately 80% of our corporate exposure is investment grade, including international exposure, of which approximately 90% is either investment grade or exposure to multinationals and their subsidiaries. And on the bottom right side of the slide, you can see that our corporate non accrual loans increased in the quarter resulting from idiosyncratic downgrade but remain low. We feel good about the high quality nature of our portfolio, which reflect our risk appetite framework and our focus on using the balance sheet in the context of the overall client relationship. Turning to capital and balance sheet on Slide nine, where I will speak to sequential variances. Our $2,600,000,000,000 balance sheet increased 2% with growth in cash and loans partially offset by lower trading related assets.

End of period loans increased 3%, primarily driven by markets and USPB. Our $1,400,000,000,000 deposit base remains well diversified and increased 3% driven by Services. We reported a 115% average LCR and maintained over $1,000,000,000,000 of available liquidity resources. We ended the quarter with a preliminary 13.5% CET1 capital ratio, which incorporates a 100 basis point management buffer and is 140 basis points above our current regulatory capital requirement of 12.1%. As we announced earlier this month, under the current stress capital buffer framework for the standardized approach, we would expect our regulatory capital requirement to decrease from 12.1% to 11.6%, which incorporates the expected reduction in our SCB from 4.1% to 3.6%.

That being said, we await finalization of the Federal Reserve's proposed rulemaking to reduce variability in the SCB, which includes averaging results from the previous two consecutive years and modifying the annual effective date from October 1 to January 1. If the averaging were to be implemented as the proposal is written, we expect our SCB to be 3.8%. And as a reminder, we announced an increase to our quarterly common dividend to $0.60 per share following the SCB results effective in the third quarter. Overall, we were pleased to see the improvement in our DFAST results and the corresponding reduction in our SCB for the second consecutive year. Even with these reductions, we remain very focused on efficient utilization of both standardized and advanced RWA.

Turning to the businesses on slide 10, we show the results for services in the second quarter. Revenues were up 8% driven by growth across both TTS and security services. NII increased 13% driven by an increase in average deposit and loan balances as well as higher deposit spread, partially offset by lower loan spread. NIR was down 1% as continued growth in fees was more than offset by higher lending revenue share. We continued to see strong activity and engagement with corporate clients and momentum across most underlying fee drivers including cross border transaction, assets under custody and administration and U.

S. Dollar clearing with total fee revenue up 6%, which we've included on the bottom left side of the slide. Expenses declined 2% driven by the absence of tax and legal related expenses in the prior year, largely offset by higher compensation and benefits including severance as well as technology costs. We continue to make investments in our platform and products to win new clients and deepen with existing clients. Cost of credit was $353,000,000 driven by a net ACL build of $333,000,000 primarily related to transfer risk associated with our clients' activities in Russia.

Average loans increased 15%, driven by continued demand for trade loans globally as our clients expand their operations and suppliers. Average deposits increased 7% with growth across both international and North America, largely driven by an increase in operating deposits. Services generated positive operating leverage for the fourth consecutive quarter and delivered net income of 1,400,000,000 with an ROTCE of 23.3% in the quarter and 24.7% year to date. Turning to markets on slide 11. Revenues were up 16% driven by growth across both fixed income and equity.

Fixed income revenues increased 20 with rates in currencies up 27%, reflecting increased client activity and monetization across both corporates and financial institutions. Spread products and other fixed income was up 3%, driven by higher financing activity and loan growth, partially offset by lower credit trading. Equities revenues were up six percent. Excluding the impact of the Visa B exchange offer in the prior year, Equities revenues were up over 35% with solid growth across all products, driven by momentum in Prime Services with record balances up approximately 27% as well as higher client activity and volumes in cash equity and strong monetization of market activity and derivatives. Expenses increased 6% largely driven by higher volume and other revenue related expense.

Cost of credit was $108,000,000 driven by a net ACL build of $100,000,000 due to changes in portfolio composition, including exposure growth. Average loans increased 14%, driven by financing activity and spread products. Markets generated positive operating leverage for the fifth consecutive quarter and delivered net income of $1,700,000,000 with an ROTCE of 13.8% in the quarter and 14 year to date. Turning to VACIMO, Slide 12. Revenues were up 18% driven by growth in Corporate Lending and Investment Banking, partially offset by the impact of mark to market on loan hedges.

Investment Banking fees increased 13% with growth in M and A and ECM, partially offset by a decline in DCM. M and A was up 52%, with gains across a multitude of sectors and with financial sponsors. ECM was up 25% with strength in convertibles and IPOs as markets stabilized late in the quarter. And while DCM was down 12 as our investment grade volumes decreased versus very strong performance in the prior year, we continued to gain share in leveraged finance. Corporate lending revenues excluding mark to market on loan hedges increased 31%, primarily driven by the impact of higher lending revenue share.

Expenses were up 1% as higher volume and other revenue related expenses and continued business investments were primarily offset by benefits of our prior actions to right size the workforce and expense base. Cost of credit was $173,000,000 which included a net ACL build of 157,000,000 primarily driven by changes in portfolio composition, including sequential growth in lending. Banking generated positive operating leverage for the sixth consecutive quarter and delivered net income of $463,000,000 with an ROTCE of 9% in the quarter and 9.8 year to date. Turning to wealth on slide 13. Revenues were up 20% with growth across CityGold, the private bank, and Wealth at Work.

NII, which you can see on the bottom left side of the slide, increased 22% driven by higher deposit spread, partially offset by lower mortgage spread and lower deposit balances. NIR increased 17%, driven by an $80,000,000 gain on the sale of our alternatives fund platform to iCapital as well as higher investment fee revenue as we grew client investment assets by 17%. Expenses were up one percent as higher volume and other revenue related expenses, episodic items, and severance were primarily offset by benefits from continued actions to right size the expense base and lower deposit insurance costs. End of period client balances continued to grow, up 9%. Average loans declined 1% as we continue to be strategic in deploying the balance sheet to support growth in client investment assets.

Average deposits declined 3%, driven by taxes and other operating outflows as well as a shift from deposits to higher yielding investments on our platform, partially offset by client transfers from USPB, reflecting our ability to support clients as their wealth and investment needs evolve. Wealth had a pretax margin of 29%, generated positive operating leverage for the fifth consecutive quarter, and delivered net income of $494,000,000 with an ROTCE of 16.1% in the quarter and 12.8% year to date. Turning to U. S. Personal Banking on Slide 14.

Revenues were up 6% driven by growth in Branded Cards and Retail Banking, partially offset by a decline in Retail Services. Branded Cards revenues increased 11% driven by net interest margin expansion and growth in interest earning balances, which were up 7%. We continue to see growth in spend volume, which was up 4%. Retail banking revenues increased 16%, driven by the impact of higher deposit spreads. And retail services revenues declined 5%, largely driven by higher partner payments due to lower net credit losses.

Expenses were up 1%. Cost of credit was $1,900,000,000 driven by net credit losses in card. Average deposits declined 3% as net new deposits were more than offset by client transfers to wealth that I mentioned earlier. USPB generated positive operating leverage for the eleventh consecutive quarter and delivered net income of $649,000,000 with an ROTCE of 11.1% in the quarter and 12% year to date. Turning to slide 15, where we show results for All Other on a managed basis, which includes corporate other and legacy franchises and excludes divestiture related items.

Revenues declined 14% with declines across both CorporateOther and Legacy franchise. The decline in CorporateOther was driven by lower NII resulting from actions that we've taken over the past few quarters to reduce the asset sensitivity of the firm in a declining rate environment. Legacy franchises was driven by the impact of the Mexican peso depreciation, expiration of TSAs in our closed exit market, and continued reduction from our wind down markets largely offset by underlying growth in Banamex. Expenses increased 8% with growth in CorporateOther which included higher severance largely offset by lower expenses in legacy franchise. And cost of credit was $374,000,000 largely consisting of net credit losses of $256,000,000 driven by consumer loans in Banamex.

Turning to the full year twenty twenty five outlook on slide 16. Given the strong performance in the first half of the year, we now expect to be at the higher end of our full year revenue range, around $84,000,000,000 with net interest income excluding markets up closer to 4%. As it relates to expenses, as a reminder, both the level of revenue and the mix of revenue inform and impact our expense base, which we expect to be around $53,400,000,000 this year. However, if revenues were to come in above $84,000,000,000 we would expect expenses to come in higher as well commensurate with the increase in revenue. And as a reminder, currency fluctuations may impact both revenue and expenses in the balance of the year but tend to be roughly neutral to earnings.

In terms of credit, given the improvement that we've seen in both delinquency and net credit loss rates in both cards portfolios, we expect net credit losses to be within the range of 3.5% to 4% for branded cards and 5.75% to 6.25% for Retail Services. And the ACL will continue to be a function of the macroeconomic environment and business volume. Now turning to capital. We remain committed to repurchasing shares each quarter under our $20,000,000,000 share repurchase program and expect to buy back at least $4,000,000,000 this quarter. That said, going forward, you should expect us to provide precise buyback guidance on a quarterly basis. As we take a step back, the performance in the quarter and so far this year represents significant progress towards our goal of improved firm wide and business performance. We are proud of what we've accomplished, and we are well on our way to delivering the full power of our franchise. We remain steadfast and focused on executing on our transformation, achieving our ROTCE target of 10% to 11% next year, and further improving returns over time. And with that, Jane and I would be happy to take your questions.

At this time, we'll open the floor for questions. Our first question will come from Jim Mitchell with Seaport Global Securities. Your line is now open. Please go ahead.

Hey, good morning, Jane and Mark. Good you've talked about next year's 10% to 11 ROTCE target as a waypoint. You've said that a few times now. So I know you're not going to give any hard targets for 2027. But can you give us a sense of what you think the long term return profile could look like roughly and what you see as the key drivers to higher returns beyond '26?

Yeah, I would be delighted to do so. And you're right, I'm not going to be giving a target at this juncture. I feel very confident about our path forward. I think you can see this quarter. The firm is firing on all cylinders.

We have the confidence of the right strategy. We're uniquely positioned to support our cross border clients. And Mark and I both feel very pleased about how it's all coming together both within and across the five businesses. We've got this simpler yet diversified business model. We're in a strong financial position.

We feel very good about the leadership team. And we've got those hard and strategic decisions behind us so we can be on the front foot. So, I feel confident first of all about the target for next year. But as I've said, the 10% to 11% target, it's this waypoint. It's not the destination.

And we're managing the firm for the longer term with a good trajectory. And there are three drivers of higher long term return, revenues, expenses and capital. Mark, I'll take revenues. I'll hand to you on the expense and capital front. So, the revenue growth, you've seen us grow very steadily over the past few years in a, let's call them, a variety of different macro environments.

This quarter is a strong continuation of that. As I'm looking forward, banking, we've talked about continued share growth. We're very pleased with the M and A front. The pipeline is excellent. And the associated revenues around greater activity on the episodic front, I think the linkage between banking and markets there is particularly pleasing.

With services, we will just continue growing with new clients and with existing clients. We pointed to a very strong new client wins this quarter. A lot of new suppliers we've been bringing on, but also the new product innovations. I'm sure we'll talk about digital assets at some point on this call. So, I feel very good about the crown jewel continuing to deliver.

In wealth, we've got great investments runway and just huge upside. You can tell the excitement from Andy and the team, from our existing clients, the famous 5,000,000,000,000, as well as the opportunity with the new wealth creators. It's we're very much that private bank for the progress makers in the world. In markets, great quarter. But equities, I think the piece I like here is that we've now got that second leg to the strength that we have in derivatives, is in prime.

That platform is scaled. We're continuing to invest in it. It's got very high return, marginal return that comes with the growth. So, expect to see us continue there. Volatility is going to, I suspect, be a feature, not a bug of the new world order and we will benefit from that.

And again, in markets, the private market space as capital market evolves is an area our financing business is done very well positioned. Again, connectivity with banking here, for us to continue to grow, take share, and help participate in, not to mention FX options. And then finally, US personal banking. We've got a wonderful relationship with American Airlines. We've got a very exciting 26 lined up.

You've seen us with new product innovations this year with the Strata Elite coming out later on in the quarter. Retail banking, again, really hitting its stride now and feeding both wealth but also the broader NAM franchise. So I feel good on the revenue side. But Mark, let me pass to you.

Yes. So key point obviously revenue momentum. Another key point is continued expense discipline. And I think you've seen that through the first half and obviously the targets we've set for 2025. But that continues in 2026 and beyond.

The drivers there are likely to be continued reduction in severance. We talked about 2025 having a sizable severance estimate in our forecast. The transformation expenses which are going up in 2025 will trend down over time. The stranded costs which have been coming down, we bought cost stranded costs down by about $3,000,000,000 is still about $1.2 left. That will trend down over the next couple of years.

And then continued productivity, some of which will be enabled by AI that Jane mentioned earlier. So those are a number of the drivers that we think will contribute to the continued expense discipline. And I use discipline intentionally because in order to capture that revenue momentum that we've seen in the first half and that Jane outlined as drivers of the forward look, it's going to require continued investment. And so part of our responsibility is going to be driving efficiencies while making investments that allow for us to play for the longer term returns and better serve our clients. So revenue momentum, expense discipline and then finally capital and continuing to be efficient about how we use our risk weighted assets and capital.

And you heard me mention earlier us increasing our buybacks to $4,000,000,000 at least $4,000,000,000 in the quarter and we'll continue to be good stewards of our capital as we manage through 2026 and beyond.

Okay. Well, that's a very fulsome response. I appreciate it.

You didn't have another question, Jim, did you?

Did have one little follow-up on the revenue forecast for this year, the guidance. I appreciate going to the higher end. But I guess if I look at first half, 43,300,000,000.0 to get to $84,000,000,000 you're dropping $2,500,000,000 in the back half. I think last year, you kind of fell half that.

So is there something we should be thinking about? Is it just being cautious? There is seasonality, I know, in markets. Just trying to think through why the big step bet down in the second half, given the momentum.

Sure. I'll keep it brief. Look, I think we did have a very strong first half. There was obviously a great deal of uncertainty and volatility that we managed through and helped our clients manage through. The second half does seasonally tend to be softer than the first half.

We're certainly estimating that as we think about the $84,000,000,000 in the high end of that range that we've moved you to. That would include a market's second half that is down generally consistent with what we've seen historically versus the first half. Obviously, there's increased volatility and repositioning that investor clients want to take on the heels of that, we'll see how that plays out. But that's an important factor that's playing through in the '84. And then on the NII ex markets part, we do expect to see continued loan growth and operating deposit growth play through in a rate environment that is probably with fewer cuts than we expected originally.

But the short of it is that we have factored in some normal seasonality in the second half juxtaposed against the first that's driving us to the high end of the range.

Our next question will come from Erika Najarian with UBS. Your line is now open. Please go ahead.

Yes. Hi. Good morning. My first question is on capital. Mark, I appreciate that you're moving away from the quarterly buyback guide.

I'm wondering two questions. One, is 13.1% still the right level in terms of the year end target as we think about regulatory reform and SCB relief? And additionally, you're operating in a 140 basis point buffer. As we think about a regulatory reform construct that's supposed to reduce volatility in the capital minimum, when do you think is the right time to readdress that buffer?

Sure. So look, in terms of the target for the end of the year, I think it's important, as I said in the prepared remarks, to acknowledge that one, we've seen our SCB come down in the most recent DFAST results for now a second year in a row. With that said, there's still some uncertainty as to what the SCB will ultimately be. The reduction will be, depending on whether it's an average of the last two years or not, as well as the timing for it. So whether that will be the normal or historical October 1 date, or whether that will move to January 1.

And both of those factors impact the answer to your question in terms of whether the 13.1% is still the year end target or whether it's something different from that. And so until we get clarity on that, we are continuing down the path of returning as much capital as we originally had planned for. When I set that target and as we get clarity, we will adjust accordingly. But I think importantly, what you see is us pulling forward buybacks as much as we can, as early as we can, while obviously being responsible about it and taking advantage of the fact that we're still trading below book value and it makes sense to do that. So that's how I think about the 13.1%.

What I will say is regardless of the outcome of averaging or the start of the new SCB level, it does afford us more flexibility in the way of how much capital we have to buy back or redeploy and we'll continue to kind of assess that. In terms of the management buffer, we look at that on a regular basis as I've told you in the past. It's an internal management buffer. It's sized in part with how we think about volatility in RWA and AOCI as well as variability direction and tone that we're hearing from DC in terms of

SCB. Looking at capital in a more holistic way. And as we continue to get clarity on that, we'll continue to assess how much of a management buffer is required. In the meantime, we're still running it at the 100 basis points.

And my second question is, I know how important it is to work on lifting that 2020 OCC consent order. And I'm wondering, as we think about some of the costs associated with transformation, is there a way to size when the consent order is lifted, what expenses that could be freed up to reallocate to the rest of the company? I know you've talked about this with investors in the past, and you had another peer that had talked about freeing up expenses as consent orders were resolved. I'm wondering if you could give us a little bit more clarity here.

Well, first I'd say, as Jane said in her prepared remarks, we're pleased with the progress that we're making around the transformation work and there are a number of aspects of that that are at their target state, which I think is a very, very positive sign. I think I've said before that we've spent last year we spent about $3,000,000,000 investing in the transformation work and that I expected that we'd have a meaningful increase in that spend in 2025. We are seeing that increase. But I do expect that as we go into 2026 and beyond and as programs are completed and validated and proven to be sustainable and vetted by the regulators that we will start to see that spend come down in 2026 and beyond. And we'll also start to see some of the benefits from those investments help to reduce our underlying operating cost.

And the final point I'd make is that we're not just looking at these investment dollars without teasing out opportunities to extract efficiencies from them. And what I mean by that is when we talk about applying AI tools to the work that we do on a day to day basis, that includes the work that we have to do in executing against our transformation and remediating the consent order concerns. And so there too, our efficiencies and how we go about doing that, again, all of which will help to drive down cost in '26 and beyond.

I just reemphasize, you don't need to wait for a consent order to be lifted to bring the expense down. You get the work done, you go into sustainability, you hand the work over to the regulators and then they make a determination. So don't just think this only happens when orders are lifted.

As a reminder, please limit your questions to one question and one follow-up. Our next question will come from Ebrahim Poonawala with Bank of America. Your line is now open. Please go ahead.

Hey, good morning. I guess just wanted to follow-up, Mark, on the capital question. Just talk to us as we think about and appreciate what you just said, but when we think about the binding constraint from standardized to advanced, how we should think about it? And are there actions we saw in SRT trade that Citi, I think, executed in June, just what are the avenues to optimize the capital stack so that advance doesn't become a binding constraint for Citi? Any perspective would be helpful there. Thanks.

Yes, I think the first thing I'd say is that today our standardized CET1 is our binding constraint. The second thing I'd point to is that you've seen us be very disciplined over the past couple of years at managing our risk weighted assets on a standardized basis and optimizing the use of them particularly in areas like markets to ensure that we're getting the best return for the deployment of those risk weighted assets. And that is also true for how we think about Advanced as the gap between the two narrows. We're equally focused on how do we ensure that using risk weighted assets on both a standardized and advanced basis as efficiently as we can. And so we're mindful of how tight they're running.

Standardized is still the binding constraint. But as we look at the businesses and the activities that we do, we're making sure that we drive for that greater efficiency from those two metrics. But there are multiple reasons why there's a difference between standardized and advanced RWA. They have to do with how each framework treats certain credit portfolios whether it be consumer or wholesale. Standardized tends to be more punitive to the mortgage book. Advanced is more punitive to international wholesale exposures. And so we're mindful of those things as we drive towards the efficient use. But we're also mindful that the regulatory landscape continues to evolve.

And who know advanced under Basel III is supposed to be down a path of retirement. And we want to be thoughtful about how we manage the two metrics so that we aren't compromising the strategy for metric that may be temporary. Again, pleased with the tone in DC in terms of looking at things holistically and looking forward to some speedy advancement as it relates to the outcome of their reviews.

Helpful. And I guess, I think Jane alluded to this on stablecoins, there is a lot of focus on how stablecoins could be used for treasury management, global liquidity management. If we could double click on that in terms of how you're already using these internally? And do you view disruption risk to services revenues tied to increased adoption of stablecoins? Thank you.

Yeah. Look. Digital assets are the next evolution in the broader digitization of payments, financing, and liquidity. I I view it just as we were seeing, a change with fintechs, a few years ago. Ultimately, what we care about is what our clients want and how do we meet that need.

What our client wants is multi asset, multi bank, cross border, always on solutions, providing a safe and sound manner with as many of the complexities sold for them, like, compliance, accounting, reporting, etcetera. And that's what we do. We are the global leaders enabling clients to move money cross border, and digital asset solutions complement our existing product suite. So we're well advanced in developing our digital asset capabilities. You've heard me talk a lot about Citi token services and a slew of other innovations.

What they what they do is they let us modernize our own business where needed. They grew they grow new revenue streams for us and also allow us to acquire new clients. So when I look at the stablecoin side, the four main areas that we're exploring, reserve management for stablecoins, the on and off ramps from cash and coin backwards and forwards. We are looking at the issuance of a Citi stable coin, but probably most importantly is the tokenized deposit space where we're very active. And then also providing custodial solutions for crypto assets. So this is a good opportunity for us.

Our next question comes from Mike Mayo with Wells Fargo. Your line is now open. Please go ahead.

Hi. Just one specific question on the transformation costs, what were they for the second quarter? I'm just trying to get a run rate and where those go to.

Yes, I haven't broken them out here for the second quarter, Mike. What I will say is, what I said already which was we had $3,000,000,000 last year, we're increasing that meaningfully in the year and we obviously saw some of that increase play through the first and second quarter and expect to see a bit more of it in the third and fourth before trending down in 2026.

Okay. And the stranded costs you said, you have just $1,200,000,000 left of those?

Yes. The proxy, if you look at the All Other page in the bottom right hand side, it gives you a little bit of a proxy for that. The second quarter expenses look at closed or signed markets about $100,000,000 the wind down sale and others about 200,000,000 call it $300,000,000 a quarter that we have that we're continuing to push and drive out of the place. It's probably a little bit once a Banamexo Mexico deal is signed, but the good proxy is about $300,000,000 that we're still working to drive out.

All right. And then separately, maybe this is for Jane. I guess what I'm thinking, the consent order, but when the amended portion of the amended consent order comes off, and I know you can't answer that directly, but what is it you're trying to show to regulators to help show them that the amended portion of the consent order no longer needs to be there? I mean, when you look at the substance, the org simplification is done, the exits are mostly done, the modernization, you've made progress in the two decades since stuff didn't happen, the management restructuring done to five lines of business. And you said the data plan is on track, whereas I guess it wasn't necessarily on track before.

Citigroup (C) Q2 2025 Earnings Call Transcript

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