Turmoil can be challenging for everyday consumers but offer the sophisticated investor opportunity.
Citigroup on Tuesday (April 15) announced its first quarter 2025 financial results, spotlighting a 23% bump in trading profits amid ongoing macro uncertainty. At the same time, Citi’s credit costs increased 15% to $2.7 billion due to higher losses in card portfolios and an allowance for credit losses (ACL) build tied to macroeconomic uncertainty,
Jane Fraser, CEO of Citi, struck a confident tone on Tuesday’s investor call.
“We delivered a strong quarter, marked by continued momentum, positive operating leverage and improved returns,” Fraser said.
But it wasn’t all balancing trading profits and consumer behavior. In response to the challenging macro environment, Citi is streamlining and rearchitecting its own global business. The transformation outlined to investors Tuesday was multifaceted: exiting 14 international consumer markets, simplifying its management structure and focusing on five interconnected businesses: Services, Markets, Banking, Wealth and U.S. Personal Banking (USPB).
Executives stressed to investors that despite market volatility, digital transformation and restructuring pressure, the bank’s first-quarter results showcase an organization executing decisively on a long-term vision, ultimately shedding legacy complexity while investing heavily in next-generation capabilities.
“I’m not sure any bank ever finishes with modernization, because the pace of innovation is so fast,” Fraser said.
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Citi’s Services segment — anchored by Treasury and Trade Solutions (TTS) and Securities Services — posted $4.9 billion in revenue, its best Q1 in over a decade. Though non-interest revenue dipped due to FX headwinds and episodic fees, net interest income grew 5%, powered by higher deposit spreads and volumes. Citi’s global network remained a differentiator: cross-border transaction values rose 5%, U.S. dollar clearing volume climbed 8% and TTS captured 65 basis points in market share.
Credit costs were minimal at $51 million, and net income rose to $1.6 billion. Return on tangible common equity (RoTCE) surged to 26.2%, reinforcing the segment’s role as a resilient and scalable profit driver.
Citi’s Wealth segment, covering Citigold, Private Bank and Wealth at Work, posted its strongest quarter in recent memory. Revenue grew 24% to $2.1 billion, with net interest income up 30% and non-interest revenue up 16%. Client investment assets climbed 16% year-over-year, boosted by $16.5 billion in net new investment assets.
A partnership with Palantir aims to modernize client onboarding and real-time insights, reflecting Citi’s larger digital push. While credit costs jumped to $98 million, net income still rose 62% to $284 million, delivering a 9.4% RoTCE.
Citi’s transformation efforts continued with artificial intelligence (AI) being implemented across the bank’s workflows. Citi logged 385,000 utilizations of its document intelligence and virtual assistant tools and completed 220,000 automated code reviews using its GenAI developer toolkit. AI is also being used by the bank to detect unauthorized trading and streamline reconciliations, cutting risk while boosting efficiency — a tangible sign that Fraser’s technology-first philosophy is taking root.
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The bank’s USPB revenue increased 2% to a record $5.2 billion, led by 9% growth in Branded Cards and 17% growth in Retail Banking. Though Retail Services fell 11%, the business overall saw improved interest-earning balances and deposit spreads. Mortgage originations, however, declined 10% amid a tough housing market.
Credit costs for the segment dropped 18% to $1.8 billion, largely due to a $172 million ACL release. Net income more than doubled to $745 million, with RoTCE jumping from 5.5% to 12.9%. New consumer products like Flex Pay on Apple Pay and AI-powered customer service tools underscored Citi’s intent to modernize retail banking.
The “All Other” segment — which includes wind-down operations, including Mexico and legacy Asia markets — was a drag on performance. Revenues plunged 39% year-over-year to $1.4 billion, while expenses fell 17% to $2.2 billion. Credit costs increased 93% to $359 million, largely due to consumer losses in Mexico.
The segment posted a net loss of $870 million, widening from $477 million a year ago. This remains a key area of weakness as Citi finalizes divestitures and works to offload remaining non-core operations.
Despite macroeconomic headwinds, Citi reaffirmed its full-year guidance, projecting net interest income of $83-84 billion and holding expenses just under $53.4 billion.
“When all is said and done … the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency,” Fraser said.
