Citigroup at Barclays Conference: Strategic Growth Insights

On Tuesday, 09 September 2025, Citigroup (NYSE:C) presented at the Barclays 23rd Annual Global Financial Services Conference. Mark Mason, Citigroup’s CFO, highlighted the company’s strategic progress and financial outlook, showcasing five consecutive quarters of positive operating leverage. While Citigroup remains optimistic about its growth trajectory, challenges such as potential Federal Reserve rate cuts and tariff pressures were acknowledged. The company emphasized its resilience and strategic investments in technology and talent to navigate these challenges.

Key Takeaways

• Citigroup achieved five consecutive quarters of positive operating leverage across all business segments.
• The company expects full-year revenues for 2025 to exceed $84 billion.
• Citigroup is investing in AI and technology to drive efficiencies and improve client services.
• The Strata Card was introduced to target higher-end customers.
• Citigroup is proceeding with a $20 billion stock buyback program.

Financial Results

• Citigroup has maintained positive operating leverage for five consecutive quarters, with all five business segments showing consistent growth.
• The services business contributes $20 billion in revenue, with high margins and efficiency.
• Third-quarter investment banking fees and market revenues are expected to rise mid-single digits year-over-year.
• Full-year revenue guidance for 2025 is set to exceed $84 billion, with expenses potentially increasing due to higher revenues and FX impacts, while remaining EBIT neutral to positive.
• The company aims for a 10% to 11% return on tangible common equity (ROTCE) by 2026.

Operational Updates

• Citigroup is focusing on transformation efforts, including modernizing infrastructure and improving risk controls.
• Investments in talent and technology are ongoing, with strategic partnerships with Palantir and BlackRock to enhance wealth management and investment solutions.
• The introduction of the Strata Card is part of Citigroup’s strategy to expand its card portfolio for higher-end customers.
• AI adoption is a priority, with 180,000 employees using AI tools to improve efficiency and client services.

Future Outlook

• Citigroup expects revenues to continue increasing in 2026, with expenses projected to decrease compared to 2025.
• The company is focused on maintaining top-line momentum, expense discipline, and capital returns to achieve its ROTCE target.
• Growth is anticipated in banking fees, U.S. dollar clearing, cross-border volume activity, and wealth management.
• Citigroup is preparing for the IPO of its Mexico business, with timing contingent on market conditions and regulatory approvals.

Q&A Highlights

• Citigroup expressed satisfaction with the regulatory environment and the willingness of regulators to adopt a more analytical approach to capital management.
• The company is committed to its $20 billion buyback program, aligning with its capital management strategy and CET1 ratio target.

In conclusion, Citigroup’s presentation at the Barclays Conference outlined a robust strategic plan focused on growth and efficiency. For a detailed review, readers are encouraged to refer to the full transcript.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Jason Goldberg, Barclays Analyst, Barclays: Afternoon. I think I know most of you. But for those that I don’t, I’m Jason Goldberg, and I cover The U. S. Large cat bank stocks here at Barclays.

Thank you for attending our twenty third Annual Global Financial Services Conference. The feedback so far in the presentations and meeting has been terrific. And I’m almost certain today the rest of today and tomorrow, we’ll measure up. I’m very excited we get to showcase Citigroup at lunch this year. A U.

S.-based global financial services conference would not be complete without Citi. Since its twenty twenty two Investor Day, Citi has taken decisive actions to make its preeminent banking make it a preeminent banking partner for institutions with cross border needs, a global leader in wealth management and a valued personal bank in The U. S. It has simplified its operations and is seeing improving financial performance. Citi and its five businesses that is now centered around, each achieved positive operating leverage in the second quarter.

In fact, this is the fifth consecutive quarter of positive operating leverage for Citi as a whole and the fourth consecutive quarter of positive operating leverage across each of its five business segments. It also continues to advance its transformation, including consolidating and modernizing its infrastructure, retiring legacy applications and improving its risk and controls. And it’s also stepped up its share repurchase activity. T. Rowe Price’s Eric Val hosted a podcast interviewing Citigroup’s CEO, Jane Fraser, last week.

On it, I think he summed it up well or Jane summed it up well as I’m declaring this is a new Citi. From Citi, we’re very pleased to have back Mark Mason. Recall, Mark was named Chief Financial Officer of Citi in February 2019. Mark Pryor served as CFO of Citi’s Institutional Client Group and was the executive responsible for CCAR submission process. In his spare time, Mark serves on the Board of Directors of Microsoft, among many other things.

So with that, thank you for joining us today. You have your ARS clickers in the middle of the tables. Feel free to use those. We’ll have some questions kind of spurred from now. The first question is the same one we’ve asked from all the companies so far.

Mark, thanks again for being here. Thank you, Jason.

Mark Mason, Chief Financial Officer, Citigroup: Great to be here with you. It sounds like the conference has been going great so far. So happy to be joining you guys. So far, so good.

Jason Goldberg, Barclays Analyst, Barclays: Mark, whenever we sit down, I always like to start with kind of the big picture sentiment. Obviously, as I just talked about, Citi has unique global footprint. Maybe kind of just what’s your take on the macroeconomic outlook in The U. S. And globally?

And just what are you hearing from clients? And what are you seeing in terms of consumer and corporate behavior? Yes, sure. Look, the global economy,

Mark Mason, Chief Financial Officer, Citigroup: I think, in many ways, continues to be quite resilient. And that’s amidst, I think, persistent uncertainty. And we’ll kind of talk through that. But I think, by and large, the world is, in many ways, continues to focus on The U. S.

What’s going to continue to happen with tariffs? We’ve gotten some clarity since January, but there’s still some outstanding decisions or negotiations that need to occur. There’s clearly a lot of focus on how that plays out in terms of how much do corporates absorb versus shows up in inflation. And so a lot of eyes on the inflationary metrics and how they’ll evolve over the coming weeks. A lot of eyes on employment and what that means.

And ultimately, I think there’s a general consensus now that we’re likely to see rate cuts through sometime in the back half of the year, starting at September and likely through 2026. And when I sum all of that up, we’re looking at the back half to likely have slowing growth and 2026 to have slowing growth as well. But when I take a step back and I think about how I’m seeing things, the markets are wide open. We are seeing continued strong engagement with our corporate clients, particularly in our banking business as it relates to M and A activity. The IPO pipeline is strong with a lot of dialogue that should manifest itself into 2026.

We’ve got a lot of rich dialogue with clients around the globe as they think about how to manage through some of the outcomes from a tariff point of view. We’re part of that dialogue given our services platform on how they think about trade partners, how they think about supply chain corridor shifts that they need to make. And so a lot of rich dialogue across the entire strategic perspective, if you think about what we’re doing with those clients. And then on the consumer side, we continue to see spend up, particularly in our branded card portfolio. We watch this very closely in light of some of the things that I’ve mentioned, but we aren’t seeing any abnormal signs around delinquencies with our card customers or NCL rates.

We expect those to be inside of the range that we’ve talked about for the past couple of quarters. And so as I take a step back and look at it, we are making good progress on the execution of our strategy in an environment that is likely to slow a bit and still has a fair amount of uncertainty, but we feel very good about the progress that we’re making and that we’re likely to continue to make here.

Jason Goldberg, Barclays Analyst, Barclays: And maybe against that backdrop, we could dig digger into some of the businesses. Yes. You touched on services, so maybe start there. Citi’s crown jewel, but facing likely Fed cut next week, as you touched on, tariff related pressures potentially, stablecoin, who knows, but that has the ability to impact cross border payments. Maybe just talk to how your vision is to handle this evolving landscape.

Mark Mason, Chief Financial Officer, Citigroup: Yes. Look, I think we’ve got to remind ourselves that this is a through the cycle business in many ways, right? This is a $20,000,000,000 revenue business for Citi that covers large multinationals around the world. We cover probably 85 of the Fortune 500. And we cover their needs as they range from payments to liquidity to financing needs, and we’ve been doing that consistently year after year.

It’s a high margin business, mid-50s operating efficiency, mid-20s return on tangible common equity. So we have a very strong position as it relates to serving these clients, particularly on the TTS side, and a part of how they think about their operations. We’ve been growing the business, both NII but also NIR as well. As I sit here in the quarter, we see good continued momentum on both of those lines. In the case of NIR, clear U.

S. Dollar clearing, cross border flows all look continue to look healthy for us. And so I feel good about where the business has come from and where the business is going. We have client segments like the commercial segment that is still an opportunity for us to tap more strongly, and we’re focused on that as well. And so I feel like we’re well positioned to manage a lower rate environment.

We obviously have a lot of deposits that are diversified with this client base, and we also are very deliberate around how we manage beta with these client base with the client base that we have here. But we also have the tailwind, if you will, of reinvesting maturities that or investment securities that are maturing into higher yielding assets and even cash at a higher rate, and that will play through this P and L as well. So strong position as I think about services. The space continues to evolve. Anytime you have a business that has an ROTC of mid-20s, it’s going to be a competitive business, right?

And so we’ve seen digitization of payments. In some ways, the digitization or digital assets like stablecoin is an extension of that, so to speak. But we’ve managed through these types of dynamics before, just fintechs a couple of years ago. And as we think about it, I take a step back and say, what are our clients looking for? And are they ready for that shift?

So they’re looking for multi asset, multi bank, cross border, always on, 20 fourseven ability to move and manage their money. That’s what we provide for them today. We have an offering called Citi Token Services that allows for the movement of fiat twenty fourseven, three sixty five days inside of our network, and we’re rolling that out to our clients. There have been some recent changes from an administration point of view around the Genius Act. That’s a good thing.

That opens up our ability to not only better serve our existing clients, but more broadly think about the offering that we have and frankly, perhaps even tap a new client base as others look to issue stablecoin, we can provide some of the services that are needed there. So I feel good about how we’re positioned. I think our model is quite resilient, and I’m looking forward to continued momentum in the services business. And maybe turn banking.

Jason Goldberg, Barclays Analyst, Barclays: I think every week, I could see another headline pop up on my Bloomberg terminal, Citi has hired X and X from XYZ firm. Can you talk to just where you are kind of in that hiring process? And how that kind of impacts the P and L looking out? Yes. Look, I mean,

Mark Mason, Chief Financial Officer, Citigroup: look, this is obviously a talent business, right? And if you take a step back, what I’m really excited about when I look at all five of these segments is that we have real really strong operators that are running these businesses, right? So Viz came in and with the team that he had with the support of the team that he had there, he took a hard look at the cost structure of our banking business, the sectors where we have a presence, where we were strong, where we needed to enhance the talent that’s there, some recognition that we’ve been investing in talent for a number of years now. And in fact, the investments that we made a couple of years ago are a part of what fuels the strong momentum we’re seeing in this business kind of quarter after quarter already. We grew the top line there.

Fees were up 13% last quarter, right? And so you took a hard look at that and identified where else do we need to beef up strength, right? And so you’ve seen some recent hires in M and A. We’ve obviously made hires in health care, in tech, in Lev Fin, etcetera, and that’s going to pay dividends. We’ve got a track record of earning a return on those investments, and we intend to continue to deliver that over the coming quarters.

So I feel good about it, one, because it was done in a very methodical way. How do we create capacity to fund these investments that drive top line momentum as the economy continues to evolve? And that’s what we’re doing.

Jason Goldberg, Barclays Analyst, Barclays: And maybe just on wealth, kind of going through this whole reboot process, maybe take us through kind of what you’ve done and kind

Mark Mason, Chief Financial Officer, Citigroup: of what inning you think you are in that evolution? Yes. Another great example, right, of I think a very strong operator in Andy, came in similar to Viz, took a hard look at the operations, the cost structure, how much are we spending in back office, middle office, do we have the strength in talent as we think about growing our investment capabilities and offering there? Very methodically took out excess costs that wasn’t driving top line revenue in order to create capacity to invest in the operations. So the hiring that we’ve made both in building out our investment capabilities, but also in bankers on the front end and investment specialists in many ways benefited from that capacity in the funding of those investments that have been made.

And we’re starting to see that momentum play through as well, very strong revenue growth. Last quarter, net new investment assets as I sit here today are showing continued momentum, right? And so and we’re on our way to getting to those medium term targets as we look at next year. And so I feel again, I feel very good about the work that we’ve done. We’re focused on the right things.

We announced, obviously, partnership with Palantir. I think a good example of how we’re using AI and AI like tools to access our data to better serve our clients. We announced an arrangement with BlackRock just a week or so ago in terms of how we expand the offering for our open architecture investment solutions to our clients. And so doing all the right things to position us to grow the wallet share that we have with existing clients and onboard new clients with an eye towards how do we do more investments with them.

Jason Goldberg, Barclays Analyst, Barclays: And I guess kind of sticking with the line of business approach, when I think of The U. S. Consumer franchise, probably the number one question I’ve gotten recently is just the introduction of the Strata Card kind of rounding out your card offering. It’s obviously a competitive space. Just maybe talk to how that fits into the overall strategy.

Mark Mason, Chief Financial Officer, Citigroup: Yes. Look, I mean, again, you’ll hear a theme from me. You’ve heard a theme from us, the importance of being disciplined about managing our expenses and driving our expense base down, while at the same time investing across the franchise so that we can capture upside revenue momentum and bring on new clients. I think the Strata Card is a perfect example of that, of rounding out the card portfolio that we have. This is focused on the higher end customers that we have and want to continue to bring on.

It’s a very competitive product. This is a very competitive space. But I think we priced it in a very smart fashion, and we’ve enhanced the rewards that customers are looking for in their high end cards. So you get outsized, I think, travel rewards in the way of points across all products, but in particular, travel. And again, it’s priced, I think, very competitively, in fact, lower than many of the like for like cards.

So outsized rewards for a better price and an example of the investments that we’ve been making. And I’ll tell you here that what we’re seeing in the way of the early days of take up on the card have been very strong, right, and consistent with expectations, but very strong. Interesting.

Jason Goldberg, Barclays Analyst, Barclays: Maybe you can maybe kind of pull up and think more kind of near term looking at the third quarter. Maybe just talk to what you’re seeing in terms of investment banking fees. You mentioned markets wide open, trading markets revenues and maybe if there’s anything else you’d call out.

Mark Mason, Chief Financial Officer, Citigroup: Yes. Again, I feel very good about the quarter and how it’s trending. As you mentioned, we’ve got a lot of strong client engagement. We’re seeing good momentum across all of our investment banking products. And so fee momentum there, I expect to be strong.

On the market side, again, lots of strong activity in rates, in spread products, in equities. And so really feel good about the continued momentum across all five segments, but in particular, those two. I’d expect in the quarter, for revenues and investment banking fees to be up kind of mid single digits. So markets revenues and investment banking fees up mid single digits year over year in the quarter, reflecting, think, like I said, the continued good momentum there. On the credit side, I kind of alluded to it earlier.

I don’t think there’s really nothing new to report here. We obviously stay focused on it. But as I said, delinquencies, NCLs on the consumer side, in line with what we’ve been expecting and nothing out of sorts as it relates to the corporate credit portfolio either.

Jason Goldberg, Barclays Analyst, Barclays: Got it. So I guess just to be clear, investment banking fees up mid single digits year over year and then markets revenue is also up mid single digits year over year. Correct. Yes. Okay.

Helpful. And then maybe kind of as we kind of think about the full year, because you kind of tend to give guidance kind of revenues and expenses for twenty twenty five in a whole. Maybe you can just update us on what you’re seeing there and some of the drivers for both?

Mark Mason, Chief Financial Officer, Citigroup: Yes. So look, I’d start with, again, five segments, strong performance through the first half. That is on track to continue. Positive operating leverage in each of those segments, expect that to be the case for the full year. Good expense discipline that we’ve been focused on that I’ve mentioned earlier, good progress in the transformation.

So a lot of positive momentum as we play through 2025. As I think about the revenue expenses that you talked about earlier, I talked about at the second quarter revenues of about $84,000,000,000 to the high end of the range that I’ve given. I talked about expenses at $53,400,000,000 That relationship still holds, the relationship of expense to revenue as I think about that. When I think about what we’re seeing and inside of that, by the way, that revenue, I talked about NII ex markets being up 4% year over year. So that’s kind of the guidance that’s out there.

As I think about what I’m seeing through the third quarter and what I mentioned about markets, what I mentioned about IB fees, and frankly, what we’re seeing in the way of FX and how that’s been trending, it is likely that we show revenues for the full year that are higher than $84,000,000,000 So better performance in aggregate across the business, but also the impact of FX playing through that. Now you’ll remember, if I think about so that’s revenue. Revenue likely to be higher than the $84,000,000,000 As we think about expenses, we talk about a couple of things. So we talk about that revenue and performance of revenue is an important factor that impacts and informs expenses, right, as well as mix of revenue, whether it’s coming in from banking, it’s coming in from markets or USBB, that has an impact on whether it’s compensatory expenses that go with that or not. And then the final piece is FX again, and FX translation.

And so as I look at that, we’ve got the combination of those things driving revenue likely to be higher than 84%, and they will have a similar impact to expenses, meaning expenses would be higher if performance shows up better and if FX or the dollar weakening persist. With all that said, it’s likely to be EBIT neutral to positive as I think about that. And the underlying drivers haven’t really changed. So we expect both NII and NIR to be contributing factors to that performance. I’d expect loan growth as well as continued deposit growth, particularly operating deposits.

On the NII side, I’d also expect, as I mentioned earlier, the reinvestment of securities that are maturing at higher yields to be a factor. And then on the NIR side, I’d expect continued growth from banking fees, from services, mentioned U. S. Dollar clearing, cross border volume activity as well as from wealth.

Jason Goldberg, Barclays Analyst, Barclays: Got it. So I guess we’ll have to wait to the next quarter earnings call to get dollar figures for that 2025 revenue and expenses, but

Mark Mason, Chief Financial Officer, Citigroup: directionally, That’s think you have a better right. Positive direction, good momentum.

Jason Goldberg, Barclays Analyst, Barclays: Helpful. I guess one of the other things you’ve talked about is when we kind of just think about expenses and you’re probably entering the whole budgeting process last year. You made the comment that expenses in 2026 should be less than 2025. But it sounds like revenues from and it will be clearly up in 2025 and likely up in 2026. Can we talk to is that still the case?

Can you kind of bring down expenses? And if so, what are the drivers there?

Mark Mason, Chief Financial Officer, Citigroup: Yes. Look, I’d say a couple of things here. And you’re right, we are in the midst of the budgeting process. But we have one thing that is very clear two things that are very clear. So one, we are squarely focused on our expense base and driving efficiencies out of the or into the organization, so more generating more efficiencies, right?

And we continue to think there’s a meaningful opportunity there as I think about transformation spend and how that needs to trend downward next year. As I think about the investments that we’ve been making and those investments starting to pay off in technology and otherwise, as I think about the exits from markets and the stranded costs associated with that continuing to come up. So those same drivers we are squarely focused on. Every one of our functions and businesses are working and managing towards a target operating model that is informed by technology investment, how we think about leveraging AI in order to drive cost of execution down, and we’re not going to let up on that focus. The other thing that’s important to not lose sight of is that I am also squarely focused on returns, right?

So as I think about 2026, I want to ensure that we deliver on the commitment that we’ve made of 10% to 11% ROTCE. That means continued top line momentum, which we now have significant, I think, multiple proof points of our ability to do that in varying markets consistently across five segments. I’m focused on the expenses, which I mentioned already. And I’m focused on, obviously, capital, right, and ensuring that we are returning as much capital as we can and as it makes sense and that we’re also allocating capital to where there are growth opportunities that are accretive to returns.

Jason Goldberg, Barclays Analyst, Barclays: I guess, we mentioned investments in transformation would be kind of increasing this year, which they have and kind of before coming down next year. Maybe provide some color on those drivers and maybe just more importantly, maybe update us on the progress as you made towards the transformation and just how much there is left to do? And maybe within that, just how you’re thinking about investments in technology? AI has come up quite a bit.

Mark Mason, Chief Financial Officer, Citigroup: Yes. So we talked a lot about this on the earnings call in the sense that last year, we spent about $3,000,000,000 on transformation. I did mention to your point that we would be spending more this year. That’s largely driven by the additional work that we need to do in the areas of data and right reporting, in particular. But I would state that we continue to make very good progress more broadly across the transformation work.

And Jane gave a number of examples of that at the earnings call, including in the areas of risk and compliance. And that momentum, I think, has continued for us. And we’ve also started to see some real progress in those areas that have required more investment, such as data and reg reporting. And as we’re testing the accuracy of reg reports, etcetera, we’re seeing good improvement there. So the spend is paying off is what I would say, and it’s showing up in continued progress on the deliverables that we have from a transformation point of view.

You asked about AI. I think look and by the way, the transformation work is also subject to opportunities to execute on it more efficiently, to leverage technology in how we implement those transformation driven changes and to leverage AI tools as well. And we’re, in fact, doing that. Our approach to AI is probably multifaceted to some extent, right? And what I mean by that is, one element of it is somewhat basic in how do we ensure that we get AI tools in the hands of our employees to assist them in their day to day tasks, whether that’s summarizing documents or reviewing legal documents or whatever the day to day task may be, is there a way to help them do it more efficiently?

And we’ve rolled out those city tools to probably 180,000 employees at this point in time. And we’re tracking on a regular basis what is the adoption and therefore, the use of those tools by employees. And we’re really focused on this. Today, we had Jane’s executive management team meeting, and the first 20 pages of the discussion was business by business, function by function, what does the adoption rate look like, what percentage of the population has access to it, and how do we kind of push the use of that more aggressively? So that’s one bucket.

The second are very specialized use cases that we can deploy around the organization. So the most common one is think about your customer service organization in our USPB business supporting cards. How do we leverage AI so that they can access responses to customers’ inquiries about the account or about other queries more rapidly? And there are hundreds of use cases like that. How do we draft a credit underwriting document using the tool to save time for the underwriter, and they can go in and kind of edit the draft and make sure that that’s right.

So there are specified use cases that we developed. And then the third category is how are we using how can we use agentic AI more broadly across our technology organization. So that’s actually how can you use it to write the code versus having humans or individuals doing that. So we’ve got that three pronged approach, if you will, that we’re rolling out aggressively across the organization. We’re seeing benefits from it already, but we’re we think there’s a lot more opportunity across the organization in BAU operations as well as transformation work.

Jason Goldberg, Barclays Analyst, Barclays: And then maybe on credit, I know you touched on it earlier, but you mentioned you kind of reiterated you expect credit card portfolios charge offs to be kind of within the range you talked about on the earnings call, which is kind of better than expectations at the start of the year. Just maybe talk to a bit more in terms of what trends you’re seeing within those portfolios and anything outside of cards you’re keeping an eye on?

Mark Mason, Chief Financial Officer, Citigroup: Again, I’m not if I think about the cards portfolio, we tend to skew on the higher FICO score, higher quality portfolio as I think about that. And what we’re seeing in our branded cards portfolio, in particular, is spending increasing to the tune of, call it, 5% or so through August. So good year over year increase in spend. We are, again, seeing some loan growth, which we were expecting, so consistent with what’s expecting what we were expecting. Payment rates are have continued to normalize, so nothing abnormal there.

We are seeing a bit of a recovery or the start up as it relates to our retail services portfolio, continue to watch that. Delinquencies, again, we started to see improvement last quarter. We’re seeing nothing abnormal as it relates to that as we sit here today. And so we’re we’ve been recession readiness mode for some time as it relates to this. So we keep a very close watch on payment rates, min pay, unemployment, some of the student loan changes, what might it mean for the portfolio and the card customers that we have.

We’re watching it like a hawk. We’re running all types of scenarios around it, but we see no signs of concern as it relates to that. And similarly, on the corporate side, NALs remain, nonaccrual loans kind of remain at levels that we were expecting around that. And remember, we’ve got $27,000,000,000 of loan loss reserves on our balance sheet, a 2.7% rate there. And so I feel very good about the credit quality and very good about the reserves that we have against it that cover a multitude of scenarios.

Jason Goldberg, Barclays Analyst, Barclays: Got it. And then there’s obviously been a lot of conversations on bank regulation. Maybe talk to kind of what are your expectations and prioritization for pending regulatory changes in light of pending regime changes? And just maybe any update on the SCB specifically?

Mark Mason, Chief Financial Officer, Citigroup: Yes. Look, think that I think we are generally pleased with the overall sentiment that hearing out of D. C. And from regulators in terms of a willingness to take a more analytical approach or more to be more transparent around the approach to capital management. We think that some of the commentary around NPRs and the areas of regulatory requirements that are being reviewed is, I think, supportive.

So the willingness to look at ESLR, to look at G SIB, to consider changes in the Basel III endgame, like that’s the right dialogue and one that’s consistent with where we in industry have felt we needed to go for a long time, taking that more holistic look at capital. But we have to see how some of that continues to evolve. Obviously, on the and the timing of that is not entirely clear. We have heard that we expect by the end of the year to get some clarity on Basel III: Endgame. We obviously have a bit of we have the outcome from the SCB, which was, for the second year in a row, improvement for Citi.

And we’re awaiting clarity on the timing for the two year averaging. Is that going to be something that gets applied January 1? Is that something that might be applied to the October 1 date? So there’s still some uncertainty there. But nonetheless, we are pleased with the sentiment and the overall direction that things seem to be trending.

And in our case, as it relates to the SCB, that certainly does suggest additional capacity as it relates to capital.

Jason Goldberg, Barclays Analyst, Barclays: And I guess in July, you talked about at least $4,000,000,000 of buyback in 3Q, which is a nice step up from what we’ve seen. I mean how should we think about the pace going forward? What factors do you consider as you think about your CET1 target ratio? Just how does

Mark Mason, Chief Financial Officer, Citigroup: the regulatory environment play into that? Yes, some of it’s But yes, we did talk about at least $4,000,000,000 We also talked about a $20,000,000,000 buyback program that we continue to lean into. And I think in many ways that speaks to the earnings generation power of the franchise, which I think is very strong. I think the factors that become important are additional clarity on that capital stack and those regulatory requirements, both in the form of the SCB, which we talked about a little bit here, but also the other metrics that are considered as well, whether advanced and how Bible study advanced kind of continues to evolve, the endgame would have implications on that. What happens with the GSIB score and whether that is retroactive, so to speak, or just forward looking, I think that’s an important consideration.

And supplementary leverage ratio that we’ve talked about. Those are all important considerations that play into the go forward as well. But at a minimum, the improvement that we’ve seen in the SCB and whether that means that we’re holding ourselves to a 12.6% CET1 ratio or a 12.8% CET1 ratio, which is the averaging of the two years, in either scenario, it creates capacity for us to continue to lean in on buybacks and doing so while we’re still trading close to book at this point, a little bit better than book, should say, at this point, but lower than where peers are trading.

Jason Goldberg, Barclays Analyst, Barclays: Got it. On the CE1 target, it’s 11? So Oh, you’re adding them 100 basis

Mark Mason, Chief Financial Officer, Citigroup: management buffer. We’re adding the 100 basis point management buffer. So I

Jason Goldberg, Barclays Analyst, Barclays: guess even when we kind of think about this new regime that 100, where could that number come down?

Mark Mason, Chief Financial Officer, Citigroup: We look at this all the time, right? And as we talked about before, volatility around SCB, volatility around AOCI, those are all factors that we consider as we stress the portfolio. But we’re constantly looking at the management buffer. And at the right time, we’ll talk to that or adjust that accordingly. But right now, 100,000,000 is what we’re managing or using as a management buffer and intend to continue at this point.

Jason Goldberg, Barclays Analyst, Barclays: Got it. And then just any update can you provide us on Mexico and the path towards the IPO?

Mark Mason, Chief Financial Officer, Citigroup: Not a lot to update here. I mean we continue to make very good progress in our readiness for the IPO. We’re working to ensure the financials are where they need to be by the end of the quarter. The business continues to perform in a very strong fashion. So we’re doing everything within our control to be ready by the end of the year for IPO.

But obviously, that will be market dependent and will require appropriate regulatory approvals. And when we think about those things, that could very well put us into 2026. But we’re controlling the controllables as best we can and making good progress in that regard.

Jason Goldberg, Barclays Analyst, Barclays: Got it. Let me put up the next ARS question on today’s ROT target. And Mark, while the audience is taking a crack at this, let me ask you. And just maybe taking a step back, can you touch on the progress that you’ve made since 2022 and the drivers of improvement to that 10% to 11% target you keep on referring to for 2026?

Mark Mason, Chief Financial Officer, Citigroup: The drivers? So I think a couple of things. So first, you to point on the progress. I think we’ve made significant progress across the business. If you kind of just think back to 2022 and since then, we’ve exited nine of 10 countries and Poland is going to close next year.

We’re making good progress on Russia, China, Korea in terms of the wind down activity around those. We’ve simplified and restructured the entire organization, removing kind of that regional construct and creating these five segments, providing transparency to our investors in terms of how those segments are performing. And more importantly than that, we’ve executed against the strategy, and it’s showing up in both top line performance, expense discipline, the positive operating leverage, improving returns in each of the businesses and in aggregate. We’ve made progress on transformation. Sure, there have been things that we’ve had to kind of take a relook at.

But by and large, I think we’re making very good progress on the transformation. We continue to invest in the franchise while demonstrating good expense discipline. So I feel as though we’ve made a lot of good progress in, frankly, an environment that none of us could have predicted or forecasted over the past couple of years leading into that. So in terms of the drivers, as we think about the 10% to 11% next year, In some ways, it’s more of the same. So it’s more top line momentum.

And again, I think the diversification of our five segments, in some ways, highlights the resiliency for most environments. So more top line momentum. I see one of the areas that are highlighted here are expense efforts. That is an area that you heard me mentioned earlier, we remain focused on. But I got to tell you, we’re going to strike the right balance here because I think that it’s not only important that we extract those efficiencies that I mentioned earlier across each of the businesses and in the functions, but it’s also important that we invest so that we have a sustainable franchise that is delivering north of 10% to 11% as we go beyond 2026.

So we’re going to strike that balance in the right way. But those are the drivers. There’s top line momentum, good expense discipline, including investments and returning capital, right, and improving the return on capital. And we’re focused on how we balance those three or four things.

Jason Goldberg, Barclays Analyst, Barclays: Why don’t we move to the next ARS question? Why I ask Mark this. I guess, Mark, what are the main points you want investors to take away from regarding Citi’s current positioning of value? And maybe what are your top priorities for the remainder of this year and going forward?

Mark Mason, Chief Financial Officer, Citigroup: Let me take the second part first, which is the top priorities. They haven’t changed in terms of what we talked about in January. It’s continued progress on the transformation, and it’s improving the performance of each of our businesses in these five segments. So business performance and transformation execution. Again, I think we’re making progress and have made progress through the year on both of those things.

And as I look out towards the end of the year, we have line of sight towards continued progress on that. Look, I think that we I don’t underestimate, or I see the value in each of these five segments and still see significant upside, both on the top line and in the way of returns. And I think when we were here maybe a year ago, there was a lot of skepticism on our ability to generate revenue, which led to the focus on expenses. I think we’ve proven that we can continue to generate top line momentum across these businesses. And I think I don’t think we should lose sight of that.

I don’t think we should underestimate that. I think the expense piece, and I saw the prior page, we’re going to continue to put the proof points on the table and deliver on the targets that we’ve set, notwithstanding that there will be things like investments and things like top line momentum that contribute good cholesterol to that expense base. And I’m going to continue to be transparent with you all where that is the case, right? This is where we’ve been able to take our costs down. Here are some external factors that have influenced that expense base in a positive way because we’ve outperformed versus what we expected to occur or because FX has played through both the top expense line.

But at the end of the day, it’s EBIT neutral to EBIT positive, right? And that transparency, I hope, will help you all see the byproduct of our efforts around the expense work, which I think have been extraordinary and will continue to be an area of focus for us. So look, I think there’s a lot of upside to the firm, obviously, and to the stock and to the valuation. And I hope that people are recognizing the proof points that we continue to put on the board, and we’re not going to stop. So we’re excited about where we

Jason Goldberg, Barclays Analyst, Barclays: are and where we have to go. It’s interesting. You asked the audience 10% to 11% ROTC for next year, what they think it should be capable of longer out. Jane has been pretty clear, 10% to 11% is kind of the waypoint. The audience seems to be gravitating towards 13% to 14% as the most common answer, though some people above that, some people below that.

Yes, I’d love to see the price

Mark Mason, Chief Financial Officer, Citigroup: of the book reflect that. So

Jason Goldberg, Barclays Analyst, Barclays: on that note, please join me in thanking Mark for his time today.

Mark Mason, Chief Financial Officer, Citigroup: Thank you. Thank you all. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.