Why is reported EPS growth of 53% so much higher than the underlying growth rate?

The prior-year third quarter included a $726 million goodwill impairment ($714 million after-tax) tied to the agreed sale of a 25% stake in Banamex, which depressed 3Q25 EPS to $1.86. Excluding that notable item, prior-year EPS was $2.24, so the underlying increase to $2.85 is about 27%. Investors should use the ex-item comparison for a like-for-like view.

Is Citigroup on track to meet its return targets?

Management said it expects to exceed this year's return target while accelerating investment toward an 11-13% near-term RoTCE goal, with sustainable returns of 14-15% as the longer-term objective. Quarterly RoTCE of 11.5% is within the near-term range, but it declined from 13.0% in the prior quarter, so achieving the target depends on sustaining revenue momentum and controlling expenses.

What are the main risks flagged in the quarter?

Quarter-over-quarter revenue fell 4% and Markets revenue fell 13%, with Equities down 25%. Credit provisions rose 6% year over year, and the supplementary leverage ratio dropped to 5.0% from 5.2%. Management also pulled forward investment spending, and the filing cites macroeconomic, geopolitical and Middle East conflict risks. Many metrics are preliminary as of September 30, 2026.

How strong is Citigroup's capital position?

The CET1 ratio was 12.8% (preliminary), unchanged from the prior quarter and down from 13.3% a year earlier, and it remains Citi's binding constraint. The total capital ratio was 15.7%. Capital was supported by net income, offset by $4.1 billion of buybacks and dividends and by unrealized losses on AFS securities. The SLR at 5.0% is lower than the prior quarter and year-ago levels.

Which business drove growth and which lagged?

Services led with 15% revenue growth and 27% net income growth, supported by deposit spreads and balances, and Wealth grew revenue 15% with net income up 93%. Banking revenue rose 6%, driven by ECM. USCC revenue was flat and net income fell 8%, while All Other remained loss-making, with a net loss of $955 million, driven by Legacy Franchises and Corporate/Other.

CITIGROUP INC 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 13, 2026. Cited figures are marked; the original filing is the authoritative source.

Citigroup reported third-quarter 2026 net income of $5.2 billion^a, or $2.85 per diluted share, on revenues of $23.8 billion, up 8% year over year.

Reported EPS rose 53% from $1.86^b, though the comparison is flattered by a prior-year goodwill impairment of $726 million tied to the Banamex stake sale; excluding that notable item, EPS grew 27% from $2.24. Revenue strength came from Services (up 15%), Markets (up 6%), Banking (up 6%) and Wealth (up 15%), partly offset by a decline in All Other. Quarter-over-quarter, revenue fell 4% and net income fell 10%, reflecting lower Markets revenue and higher provisions.

Return metrics improved year over year: RoTCE was 11.5% versus 8.0%, and ROE was 10.1% versus 7.1%. Management said it expects to exceed its full-year return target while pulling forward investment toward an 11-13% near-term goal, on the way to sustainable 14-15% returns. The company returned $4.1 billion^c to common shareholders in the quarter, a payout ratio of 85%.

Book value per share rose 7% to $115.61^d and tangible book value per share rose 6% to $101.59. Credit and capital require attention. Total provision for credit losses rose 6% to $2.6 billion, with a net reserve build of $369 million.

The CET1 ratio held steady at 12.8% (preliminary), but the supplementary leverage ratio declined to 5.0% from 5.2% in the prior quarter. Net income attributable to noncontrolling interests rose sharply as a result of the Banamex equity sales. Note that the ratios and metrics are preliminary as of September 30, 2026.

02—Key points

Key Highlights

Net income of $5.2 billion ($2.85 diluted EPS) vs. $3.8 billion ($1.86) a year ago; EPS up 27% excluding the prior-year $726M Banamex-related goodwill impairment
Revenues of $23.8 billion, up 8% YoY, the best third-quarter revenue in a decade per management, with positive operating leverage of 960 bps
RoTCE improved to 11.5% from 8.0% a year ago (down from 13.0% in 2Q26); efficiency ratio improved to 58.5% from 64.7%
Services revenue up 15% to $6.6B and Wealth up 15% to $3.3B, while Markets rose 6% to $6.1B, led by Equities (+14%)
Shareholder returns of $4.1B in the quarter with an 85% payout ratio; book value per share $115.61 (+7% YoY), TBVPS $101.59 (+6%)
Total provision for credit losses rose 6% to $2.6B on a $369M reserve build; NCLs flat YoY at $2.2B; non-accrual loans down 12% YoY to $3.3B
CET1 ratio steady at 12.8% QoQ, but SLR fell to 5.0% from 5.2% QoQ (preliminary)

03—Questions

Frequently Asked Questions

Why is reported EPS growth of 53% so much higher than the underlying growth rate?
The prior-year third quarter included a $726 million goodwill impairment ($714 million after-tax) tied to the agreed sale of a 25% stake in Banamex, which depressed 3Q25 EPS to $1.86. Excluding that notable item, prior-year EPS was $2.24, so the underlying increase to $2.85 is about 27%. Investors should use the ex-item comparison for a like-for-like view.
Is Citigroup on track to meet its return targets?
Management said it expects to exceed this year's return target while accelerating investment toward an 11-13% near-term RoTCE goal, with sustainable returns of 14-15% as the longer-term objective. Quarterly RoTCE of 11.5% is within the near-term range, but it declined from 13.0% in the prior quarter, so achieving the target depends on sustaining revenue momentum and controlling expenses.
What are the main risks flagged in the quarter?
Quarter-over-quarter revenue fell 4% and Markets revenue fell 13%, with Equities down 25%. Credit provisions rose 6% year over year, and the supplementary leverage ratio dropped to 5.0% from 5.2%. Management also pulled forward investment spending, and the filing cites macroeconomic, geopolitical and Middle East conflict risks. Many metrics are preliminary as of September 30, 2026.
How strong is Citigroup's capital position?
The CET1 ratio was 12.8% (preliminary), unchanged from the prior quarter and down from 13.3% a year earlier, and it remains Citi's binding constraint. The total capital ratio was 15.7%. Capital was supported by net income, offset by $4.1 billion of buybacks and dividends and by unrealized losses on AFS securities. The SLR at 5.0% is lower than the prior quarter and year-ago levels.
Which business drove growth and which lagged?
Services led with 15% revenue growth and 27% net income growth, supported by deposit spreads and balances, and Wealth grew revenue 15% with net income up 93%. Banking revenue rose 6%, driven by ECM. USCC revenue was flat and net income fell 8%, while All Other remained loss-making, with a net loss of $955 million, driven by Legacy Franchises and Corporate/Other.

04—Continue

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