What was the impact of the Banamex-related goodwill impairment on Citi's Q3 2025 results?

Citi recorded a $726 million pre-tax goodwill impairment ($714 million after tax) in Other expenses, tied to its agreement to sell a 25% equity stake in Grupo Financiero Banamex. It reduced reported EPS by about $0.38, from $2.24 to $1.86, and lowered ROE by about 140 bps and RoTCE by about 170 bps.

Is Citi's credit quality deteriorating?

Partly. Total cost of credit fell 8% YoY to $2.45B and net credit losses were roughly flat at $2.2B. However, non-accrual loans rose 70% YoY to $3.7B, with corporate non-accruals up 119% on idiosyncratic downgrades in Markets and Banking and consumer non-accruals up 32%, mainly in Wealth from California wildfire-related mortgages. The reserve-to-funded-loans ratio eased to 2.65% from 2.70%, so investors should watch whether the non-accrual trend continues.

How strong is Citi's capital position after the quarter?

Citi remains well capitalized, with a CET1 ratio of 13.2% (preliminary) and an SLR of 5.5%. CET1 declined from 13.5% in Q2 because share repurchases, higher risk-weighted assets and dividends outweighed net income. The company still returned about $6.1B to common shareholders in the quarter.

What does the Banamex divestiture mean for future earnings?

Citi disclosed an agreement to sell a 25% equity stake in Banamex and noted a roughly $9B cumulative translation adjustment loss currently in AOCI. Upon deconsolidation, that CTA loss will be recognized through earnings and will affect EPS and RoTCE in the period it occurs, though it is regulatory-capital neutral over time. Investors should expect a potentially significant one-time earnings impact when deconsolidation occurs.

Are Citi's revenue gains broad-based or concentrated?

Revenue growth was broad. Markets (+15%), Banking (+34%), Services (+7%, its best quarter ever), Wealth (+8%) and USPB (+7%) all grew, while Corporate/Other declined sharply to a $336M loss. Net interest income rose 12% and non-interest revenue rose 4%. Banking growth was helped by a lower mark-to-market loss on loan hedges, so underlying Corporate Lending growth of 39% should be read with that in mind.

CITIGROUP INC 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 14, 2025. Cited figures are marked; the original filing is the authoritative source.

Citigroup reported third-quarter 2025 net income of $3.8 billion^a, or $1.86 per diluted share, on revenues of $22.1 billion, up 9% year over year.

Excluding a $726 million^b pre-tax goodwill impairment ($714 million after tax) tied to the agreement to sell a 25% stake in Grupo Financiero Banamex, net income would have been $4.5 billion and EPS $2.24. Growth was broad-based: Markets revenues rose 15%, Banking rose 34%, Services rose 7% to a record quarter, Wealth net new investment assets reached a record $18.6 billion, and USPB revenues rose 7%. Operating expenses rose 9% reported (3% excluding the notable item), and total cost of credit fell 8% to $2.45 billion, helped by a net ACL release in some segments.

Return metrics improved despite the impairment. Reported RoTCE was 8.0%^c, up 100 bps from 7.0% a year earlier, and roughly 9.7% excluding the goodwill charge. Reported ROE was 7.1%.

Capital returns were approximately $6.1 billion^d in the quarter, bringing year-to-date returns to about $12 billion. The payout ratio was 176%, which reflects the quarter's lower reported earnings. Book value per share rose 6% to $108.41 and tangible book value per share rose 7% to $95.72.

The key watch items are credit quality and capital. Total non-accrual loans rose 70% year over year to $3.7 billion, with corporate non-accruals up 119% on idiosyncratic downgrades in Markets and Banking.

The CET1 ratio fell to 13.2% from 13.5% in the prior quarter, driven by buybacks and higher risk-weighted assets. Management also disclosed an expected cumulative translation adjustment loss of roughly $9 billion tied to Banamex, which will be recognized through earnings upon deconsolidation and will affect EPS and RoTCE in that period, though it is regulatory capital neutral over time.

02—Key points

Key Highlights

Q3 2025 net income of $3.8B ($1.86 diluted EPS) vs. $3.2B ($1.51) a year ago; excluding the $726M Banamex-related goodwill impairment, net income was $4.5B and EPS $2.24 (+48% YoY).
Revenues of $22.1B, up 9% reported and up 9% excluding divestiture impacts, with growth in all five core businesses and Legacy Franchises.
Markets revenues up 15% to $5.6B (best Q3 ever) and Banking revenues up 34% to $2.1B, with Investment Banking fees up 17%.
RoTCE of 8.0% (up 100 bps YoY; ~9.7% ex-impairment) and efficiency ratio of 64.7%, improved 30 bps YoY.
Returned ~$6.1B to common shareholders in Q3 (~$12B YTD); TBVPS rose 7% YoY to $95.72.
CET1 ratio fell to 13.2% from 13.5% QoQ on buybacks and higher RWA; SLR steady at 5.5%.
Credit watch: non-accrual loans up 70% YoY to $3.7B (corporate +119%), and ~$9B Banamex CTA loss expected to hit earnings at deconsolidation.

03—Questions

Frequently Asked Questions

What was the impact of the Banamex-related goodwill impairment on Citi's Q3 2025 results?
Citi recorded a $726 million pre-tax goodwill impairment ($714 million after tax) in Other expenses, tied to its agreement to sell a 25% equity stake in Grupo Financiero Banamex. It reduced reported EPS by about $0.38, from $2.24 to $1.86, and lowered ROE by about 140 bps and RoTCE by about 170 bps.
Is Citi's credit quality deteriorating?
Partly. Total cost of credit fell 8% YoY to $2.45B and net credit losses were roughly flat at $2.2B. However, non-accrual loans rose 70% YoY to $3.7B, with corporate non-accruals up 119% on idiosyncratic downgrades in Markets and Banking and consumer non-accruals up 32%, mainly in Wealth from California wildfire-related mortgages. The reserve-to-funded-loans ratio eased to 2.65% from 2.70%, so investors should watch whether the non-accrual trend continues.
How strong is Citi's capital position after the quarter?
Citi remains well capitalized, with a CET1 ratio of 13.2% (preliminary) and an SLR of 5.5%. CET1 declined from 13.5% in Q2 because share repurchases, higher risk-weighted assets and dividends outweighed net income. The company still returned about $6.1B to common shareholders in the quarter.
What does the Banamex divestiture mean for future earnings?
Citi disclosed an agreement to sell a 25% equity stake in Banamex and noted a roughly $9B cumulative translation adjustment loss currently in AOCI. Upon deconsolidation, that CTA loss will be recognized through earnings and will affect EPS and RoTCE in the period it occurs, though it is regulatory-capital neutral over time. Investors should expect a potentially significant one-time earnings impact when deconsolidation occurs.
Are Citi's revenue gains broad-based or concentrated?
Revenue growth was broad. Markets (+15%), Banking (+34%), Services (+7%, its best quarter ever), Wealth (+8%) and USPB (+7%) all grew, while Corporate/Other declined sharply to a $336M loss. Net interest income rose 12% and non-interest revenue rose 4%. Banking growth was helped by a lower mark-to-market loss on loan hedges, so underlying Corporate Lending growth of 39% should be read with that in mind.

04—Continue

← View all 8-K filings