Citigroup Inc. (NYSE:C) Q3 2025 Earnings Call Transcript

Citigroup Inc. (NYSE:C) Q3 2025 Earnings Call Transcript October 14, 2025

Citigroup Inc. beats earnings expectations. Reported EPS is $2.24, expectations were $1.73.

Operator: Hello, and welcome to Citigroup Inc.’s Third Quarter 2025 Earnings Call. Today’s call will be hosted by Jennifer Landis, Head of Citigroup Inc. Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. 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.

Jennifer Landis: Thank you, Operator. Good morning, and thank you all for joining our third quarter 2025 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.

Jane Fraser: Thank you, Jennifer, and a very good morning to everyone. This morning, we reported another very good quarter with net income of $3.8 billion and earnings per share of $1.86 with an ROTCE of 8%. Now, excluding the goodwill impairment from the Banamex transaction, our adjusted EPS was $2.24 with an adjusted ROTC of 9.7%. Revenues were up 9%, and every business had record third-quarter revenue and improved returns. We continue to generate positive operating leverage for the firm and in each of our five businesses. The consistently strong results that we’ve been delivering are a consequence of how we have fundamentally changed the bank in recent years. We’re running the businesses differently and capturing the synergies between them.

We’ve added new senior leaders to complement the excellent talent we already had. We are disciplined stewards of our shareholders’ capital, investing it where we should and returning what we don’t deploy. And the best part is there is much more upside ahead. Turning to the businesses, Services had a record quarter with revenues growing by 7%. Pleasing growth in cross-border transactions and U.S. Dollar clearing reflects the sharp focus we put on increasing fee revenue. AUCA grew 13%, reaching nearly $30 trillion. New client wins and share gains demonstrate the confidence our clients have in our ability to help them navigate a very dynamic global environment and to lead through innovation. Despite low volatility, markets had a record third quarter.

Revenues were up 15% as we continue to drive momentum and traction with clients. Activity and rates were particularly high, and equities grew nicely, with continued progress in prime where balances were up over 40%, complementing our historical strength in derivatives. In banking, increased clarity around tariffs and record equity prices fueled CEO confidence. We capitalized on this with investment banking fees up 17%, with continued growth across all products. On the back of our investment in talent, we improved our position in tech, healthcare, consumer, and responses. We continue to add talent to the team, which will help us deepen or establish relationships that will bear fruit over the next two to three years. Wealth had another good quarter with revenue up 8%, driven by Citi Gold and the private bank.

Our emphasis on growing investment assets resulted in record net new investment assets of $18.6 billion and client investment assets increasing by 14%. We announced a new partnership with BlackRock, where they will manage $80 billion of our clients’ assets, fully aligning to an open architecture strategy. USPB had record quarterly revenue of $5.3 billion, reaching 12 straight quarters of positive operating leverage, and delivered an ROTCE of over 14%. We drove momentum in branded cards with the well-received launch of our Citi Strata Elite card, and this quarter, we will introduce the new mid-tier product to round out the Citi Advantage portfolio. It will elevate the travel experience for American Airlines customers and create access to premium benefits.

In the retail bank, we continue to innovate, including by the launch of instant payment through FedNow and enabling digital issuance for Citibank debit cards. The retail bank continues to strengthen as a pipeline to our wealth business, with $4 billion in deposits transferred in the quarter. Wealth is capitalizing on those transfers, and we continue to see improved investment penetration and significantly higher investment-related revenue from those customers. We returned over $6 billion in capital to our common shareholders during the third quarter. The $5 billion in share repurchases was $1 billion more than we guided, and this reflects our commitment to returning capital. Year to date, we have repurchased $8.75 billion of shares as part of our $20 billion repurchase plan.

We ended the quarter at a common equity Tier 1 capital ratio of 13.2%, over 100 bps above our regulatory requirement at quarter-end. The agreement with Fernando Chico Pardo to purchase a 25% equity stake is a very significant step towards the divestiture of Banamex and progresses the overall timeline to deconsolidation and beyond. We are confident that this path is in the best interest of our stakeholders in terms of certainty and value, and we could not be more pleased to have Fernando, with his proven track record for investors, as our partner. As we simplify, we continue to invest in technology to catalyze our transformation and become a more agile and modern bank. We have been relentless in our execution, and it is creating results. Over two-thirds of our transformation programs are at or close to our target date, and we’re making very good progress in the remaining areas.

I’m particularly pleased with the improvement in our controls this year through standardizing, automating, and digitizing them. We continue to lead in digital payments innovation, enabling payments clearing and settlement capabilities to operate on an always-on basis across multiple borders and currencies. As networks evolve towards an always-on future, we are taking the next step by integrating Citi token services with our 24/7 clearing platform. Now, this integration will allow Citi clients to seamlessly send funds to third-party banks in real-time within our U.S. Dollar clearing network, delivering true interoperability across more than 250 institutions. We are committed to embedding AI into how we work. Nearly 180,000 colleagues in 83 countries now have access to our proprietary AI tools and have used them almost 7 million times this year.

These tools save hours each day by automating routine work, analyzing data, and creating materials in minutes instead of hours. Our services and USPB teams are using AI to resolve client inquiries faster. In wealth, advisors are gaining real-time insights that help them deliver more personalized advice. AI-driven automated code reviews have exceeded 1 million so far this year and are dramatically improving our developers’ productivity. This innovation alone saves considerable time and creates around 100,000 hours of weekly capacity as a very meaningful productivity uplift. In September, we launched the pilot of agentik.ai for 5,000 colleagues. It allows complex multi-step tasks to be completed with a single prompt, and the early results are very promising.

We will expand access to this in the months ahead. Finally, we have launched a firm-wide effort to systematically embed AI in our processes end-to-end to drive further efficiencies, reduce risk, and improve client experience. Taking a step back, the macro environment reflects the global economy that’s proved more resilient than many anticipated. The U.S. continues to be a pace setter, driven by consistent consumer spending as well as tech investments in AI and data centers. That said, there are pockets of valuation fuzziness in the market, so I hope discipline remains. But overall, while growth is cooling somewhat and keeping an eye on the labor market, America’s economic engine is indeed still coming. In Asia, China’s domestic spending has slowed.

However, the investments they are making in technology are staggering, and the world should take notice. India’s fundamentals of a young, tech-savvy labor force and robust domestic consumption continue to drive high growth there. In Europe, structural challenges still need to be dealt with for the continent to escape this low-growth cycle. One certainty through all of this is our commitment and ability to serve our clients with excellence no matter what challenge they face. As you can see, the steady and disciplined execution of our strategy is delivering better business performance quarter after quarter and improving our return. The cumulative effect of what we have done over the past years—our transformation, refresh strategy, our simplification—have put Citigroup Inc.

in a materially different place in terms of our ability to compete. We know success isn’t linear, but I am so proud of the progress our people have made and how things are coming together. We intend to end the year with momentum into 2026 as we close in on our medium-term return target. In terms of what will come next, we very much look forward to sharing that with you at our next Investor Day, which will be on May 7. There is still so much upside left for us to capture, and we look forward to laying out how we are going to do it. With that, I’ll turn it over to Mark, and then we’ll be happy to take your questions.

Mark Mason: Thanks, Jane, and good morning, everyone. I’m going to start with the firm-wide financial results, focusing on year-over-year 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 $3.8 billion, EPS of $1.86, and an ROTCE of 8% on $22.1 billion of revenues, generating positive operating leverage for the firm and each of our five businesses. On an adjusted basis, excluding the impact of a notable item consisting of the goodwill impairment that Jane mentioned earlier, we reported net income of $4.5 billion, EPS of $2.24, and an ROTCE of 9.7%. Total revenues were up 9%, driven by growth in each of our businesses and legacy franchises, partially offset by a decline in corporate other.

Net interest income, excluding markets, which you can see on the bottom left side of the slide, was up 6%, driven by USPB services, wealth, legacy franchises, and banking, partially offset by a decline in corporate other. Non-interest revenues, excluding markets, were up 12% as better results in banking, wealth, and legacy franchises were partially offset by declines in corporate other services and USPB. Total markets revenues were up 15%. Expenses of $14.3 billion were up 9%, largely driven by the goodwill impairment I just mentioned. On an adjusted basis, expenses of $13.6 billion were up 3%. Cost of credit was $2.5 billion, primarily consisting of net credit losses in U.S. Card as well as a firm-wide net ACL bill. Looking at the firm on a year-to-date basis, total revenues were up 7%, driven by growth in each of our five businesses along with the benefit of foreign exchange translation, partially offset by a decline in all other.

Expenses, which have also been impacted by foreign exchange translation, were up 2% and flat on an adjusted basis. We’ve generated positive operating leverage for the full firm and each of our five businesses and reported an ROTCE of 8.69.2% on an adjusted basis. On Slide seven, we show the expense and efficiency trend over the past five quarters. On an adjusted basis, this quarter we improved our efficiency ratio by approximately 360 basis points. The increase in adjusted expenses was driven by higher compensation and benefits along with the impact of foreign exchange translation. As you can see on the bottom right side of the slide, the increase in compensation and benefits was driven by performance-related compensation, higher severance, and investment in transformation and technology productivity and stranded cost reduction, partially offsetting continued growth in the businesses.

Year to date, we have incurred approximately $650 million of severance, slightly above our original expectation for the full year. As we’ve said in the past, we are very focused on managing our expense base in a disciplined manner, reducing stranded costs, and generating productivity savings to largely self-fund investments in transformation technology and the businesses. This discipline, combined with top-line revenue, will continue to drive improvement in our operating efficiency. On Slide eight, we show consumer and corporate credit metrics. As I mentioned, the firm’s cost of credit was $2.5 billion, primarily consisting of net credit losses in U.S. Card as well as a firm-wide net ACL bill. Our reserves continue to incorporate an eight-quarter weighted average unemployment rate of 5.2%, which includes a downside scenario average unemployment rate of nearly 7%.

At the end of the quarter, we had nearly $24 billion in total reserves with a reserve to funded loan ratio of 2.7%. We continue to maintain a high credit quality card portfolio with approximately 85% to consumers with FICO scores of 660 or higher and a reserve to funded loan ratio in our card portfolio of 8%. It’s worth noting that across our U.S. Cards portfolios, delinquency and NCL rates continue to perform in line with our expectation. Looking at the right-hand side of the slide, you can see that our corporate exposure is primarily investment grade, and while corporate non-accrual loans increased in the quarter, resulting from idiosyncratic downgrade, they remain low, as do corporate net credit losses. We feel good about the high-quality nature of our portfolios, 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 the balance sheet on Slide nine, where I will speak to sequential variance. Our $2.6 trillion balance sheet increased 1%, driven by growth in cash and loan. End-of-period loans increased 1%, driven by markets and services. Our $1.4 trillion deposit base remains well diversified and increased 2%, driven by services and wealth. We reported a 115% average LCR and maintained over $1 trillion of available liquidity resources. We ended the quarter with a preliminary 13.2% CET1 capital ratio, which is 110 basis points above our 12.1% regulatory capital requirement during the third quarter. Effective October 1, our new standardized CET1 capital ratio requirement is 11.6%, which incorporates the reduction in our SCB from 4.1% to 3.6%.

That said, we’re still waiting for clarity from the Federal Reserve on whether the averaging of STB results from the previous two consecutive years will become effective in the next few months. Given this uncertainty, we will be targeting a standardized CET1 ratio closer to 12.8%, which incorporates a two-year average SCB of 3.8% as well as a 100 basis point management buffer. As we’ve said in the past, we remain very focused on efficient utilization of both standardized and advanced RWA while providing the businesses with the capital needed to pursue accretive growth opportunities. We will continue to prioritize returning capital to shareholders through buybacks, as evidenced by the $5 billion of buybacks in the third quarter and nearly $9 billion year to date.

Turning to the businesses on Slide 10, we show the results for Services in the third quarter. Revenues were up 7%, driven by growth across both TTS and Security Services. NII increased 11%, primarily driven by the increase in average deposit balances as well as higher deposit spreads, while NIR was down 3% due to the impact of higher lending revenue share. Total fee revenue was up 6%. We see very strong activity and engagement with corporate clients and momentum across underlying fee drivers, with cross-border transactions up 10%, U.S. Dollar clearing volume up 5%, and assets under custody and administration up 13% as we continue to roll out our innovative products and services with digital capabilities into new markets. Expenses increased 5%, primarily driven by higher compensation and benefits, including severance, as well as higher volume and other revenue-related expenses.

Average loans increased 8%, driven by continued demand for trade loans as we continue to support clients as they plan for potential shifts in trade corridors. Average deposits also increased 8%, with growth across both North America and international, largely driven by an increase in operating deposits. Services generated positive operating leverage for the fifth consecutive quarter and delivered net income of $1.8 billion with an ROTCE of 28.9% in the quarter and 26.1% year to date. Turning to markets on Slide 11. Revenues were up 15%, driven by growth across both fixed income and equity. Fixed income revenues increased 12%, with rates and currencies up 15%, largely driven by growth in rates amid policy uncertainty and elevated client activity.

Spread products and other fixed income were up 8%, largely driven by higher mortgage trading, higher financing activity, and lower commodities activity. Equities revenues were up 24%, driven by higher client activity in derivatives, increased volumes in cash, and continued momentum in prime with balances up approximately 44%. Expenses increased 5%, primarily driven by higher compensation and benefits along with the impact of FX translation. Transactional and product servicing expenses were down as growth in transaction volumes was more than offset by efficiency actions. Average loans increased 24%, primarily driven by financing activity and spread product. Markets generated positive operating leverage for the sixth consecutive quarter and delivered net income of $1.6 billion with an ROTCE of 12.3% in the quarter and 13.5% year to date.

Turning to banking on Slide 12. Revenues were up 34%, driven by growth in corporate lending and investment banking. Investment banking fees increased 17%, with growth across all products. M&A was up 8%, with momentum across several sectors and continued share gains with financial sponsors and more sell-side activity. ECM was up 35%, with growth across all products, notably in convertibles given the favorable environment. DCM was up 19%, driven by leveraged finance. Corporate lending revenues, excluding mark-to-market on loan hedges, increased 39%, driven by an increase in lending revenue share. Expenses increased 2%, driven by higher volume-related transactional and product servicing expenses as well as compensation and benefits, which includes recent investments we’ve made in the business.

Cost of credit was $157 million, which included a net ACL build of $148 million driven by changes in portfolio composition, including exposure growth. Banking generated positive operating leverage for the seventh consecutive quarter and delivered net income of $638 million with an ROTCE of 12.3% in the quarter and 10.7% year to date. Turning to wealth on Slide 13, revenues were up 8%, driven by growth in Citi Gold and the Private Bank, partially offset by a decline in Wealth at Work. NII, which you can see on the bottom left side of the slide, increased 8%, driven by higher deposit spread, partially offset by lower mortgage spread. NIR increased 9%, driven by higher investment fee revenues as we grew client investment assets by 14%, despite a reduction of approximately $33 billion related to the sale of our trust business.

We had record net new investment assets of $18.6 billion in the quarter and over $52 billion in the last twelve months, representing approximately 9% organic growth. Expenses increased 4%, driven by investments in technology and volume-related transactional and product servicing expenses, partially offset by continued productivity savings. End-of-period client balances continued to grow, up 8%. Average loans were up 1%, and we continue to be strategic in deploying the balance sheet to support growth in client investment assets. Average deposits were flat, as operating outflows and a shift from deposits to higher-yielding investments on Citi’s platform were offset by net new deposits as well as client transfers from USBB. Wealth had a pretax margin of 22%, generated positive operating leverage for the sixth consecutive quarter, and delivered net income of $374 million with an ROTCE of 12.1% in the quarter and 12.5% year to date.

Turning to U.S. Personal Banking on Slide 14. Revenues were up 7%, driven by growth in Branded Cards and Retail Banking, partially offset by a slight decline in retail service. Branded cards revenues increased 8%, driven by higher loan spreads, higher interest-earning balances, which were up 5%, and higher gross interchange, partially offset by higher rewards costs. We continue to see strong customer engagement, with spend volume also up 5%. Retail Banking revenues increased 30%, largely driven by the impact of higher deposit spread and balances. Retail Services revenues were down 1%, largely driven by higher partner payment accrual. Expenses were flat, as lower advertising and marketing expenses as well as compensation and benefits were offset by higher volume-related transactions and product servicing expenses.

Cost of credit was $1.8 billion, driven by net credit losses in card. Average deposits increased 6%, as net new deposits were partially offset by the client transfers to wealth that I mentioned earlier. USPB generated positive operating leverage for the twelfth consecutive quarter and delivered net income of $858 million with an ROTCE of 14.5% in the quarter and 12.9% year to date. Turning to Slide 15, we show results for All Other on a managed basis, which includes corporate other and legacy franchises and excludes divestiture-related items. Revenues were down 16%, with a decline in corporate other partially offset by an increase in legacy franchise. The decline in corporate other 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 as well as lower NIR.

Growth in legacy franchises was driven by Mexico, which included the impact of Mexican peso appreciation, partially offset by the impact of continued reduction from our exit and wind-down market. Expenses increased 4%, with growth in corporate other, including higher severance, largely offset by a decline in legacy franchise. Cost of credit was $331 million, primarily consisting of net credit losses of $297 million driven by consumer loans in Mexico. As you can see on the bottom right side of the slide, divestiture-related expense items in the quarter included the $726 million goodwill impairment, which is capital neutral and based on the fair value of 100% of the entity. On Slide 16, we provide an overview of the agreement with Fernando Chico Pardo to purchase a 25% equity stake in Banamex.

This transaction progresses the overall timeline to exit Banamex but is subject to certain closing conditions and local regulatory approval. Before I walk through the financial impacts related to this stake at closing, I’d like to ensure you understand the net capital impact at a full exit. The cumulative capital benefit to Citigroup Inc. upon full exit will be driven by two things: one, the capital release associated with the RWA reduction, and two, the cumulative impact of any potential gains and losses on sale. However, between now and then, there will be a few steps to get there, and it starts with this transaction. So looking at the right-hand side of the page, at the time of close, and subject to the book value of Banamex at closing, we expect assets to increase by approximately $2.3 billion for the total consideration paid for the 25% stake, which reflects the fixed price-to-book value multiple of 0.8, and total equity will also increase by a net $2.3 billion, but it will be driven by a few factors.

First, there will be a temporary benefit to stockholders’ equity due to the reclassification of the negative cumulative translation adjustment from stockholders’ equity to non-controlling interest, which will be slightly offset by the loss on sale. Second, the non-controlling interest will increase by the 25% of the Banamex book value sold, but this will be largely offset by the CTA that was reclassified as part of this transaction. So net-net, a $2.3 billion increase in assets and on the equity side, a $1.8 billion increase in stockholders’ equity and a $500 million increase in non-controlling interest. At deconsolidation, there will be balance sheet impacts and P&L impacts. As it relates to the balance sheet, all of Banamex’s assets and liabilities will be removed from our balance sheet and be partially offset by any remaining equity stake.

In terms of the P&L, the entire amount of the cumulative translation adjustment related to Banamex, which is approximately $9 billion, will flow through the P&L as a loss and will reverse the temporary capital benefit from the prior sale. Therefore, at deconsolidation, the cumulative impact of CTA is capital neutral. So to wrap it up, while there are a number of accounting nuances between now and full exit, the cumulative capital impact to Citigroup Inc. will be the full release of RWA associated with Banamex and the cumulative impact of any potential gains and losses on sale. Turning to the full-year 2025 outlook on Slide 17. Before I get into the outlook, I want to say how proud I am of the company as we execute against our strategy and drive top-line revenue growth, which continues to be fueled by our investments across the businesses and in key areas such as technology and data.

We’ve made significant progress in terms of improving return with an adjusted year-to-date ROTCE of 9.2%. So now, with regard to the outlook, given the very strong year-to-date top-line revenue growth of 7%, we remain confident in our ability to exceed $84 billion in revenues for the year. We now expect NII ex-markets to be up around 5.5% for the full year, incorporating stronger performance as well as the impact of FX relative to our previous expectation. For NIRx markets, we expect continued momentum in underlying fee drivers. In markets, historically, we’ve seen revenues decline 15% to 20% from the third to fourth quarter. However, given the strong performance in the third quarter, the sequential decline could exceed that range this year.

Now turning to expenses. Our year-to-date expense base incorporates both the level and mix of revenue we’ve seen, as well as the impact of FX. Given what I just mentioned about revenues, full-year expenses will come in higher than we previously guided. However, you should expect the efficiency ratio for the full year to be consistent with the revenue and expense guidance that we provided during the course of the year, which is slightly below 64%, excluding the impact of the goodwill impairment this quarter. In terms of credit, our expectations for the year remain unchanged, and we will continue to repurchase shares in the fourth quarter under our $20 billion program. 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 remain steadfast and focused on executing our transformation, achieving our ROTCE target of 10% to 11% next year, and further improving returns over time. With that, Jane and I would be happy to take your questions.

Q&A Session

Operator: At this time, we will open the floor for questions. Please note, you will be allowed one question and one follow-up question. Our first question will come from Mike Mayo with Wells Fargo. Your line is now open. Please go ahead.

Mike Mayo: Hi. So I think you said you’re at least two-thirds done with a lot of the transformation. And I assume that relates to the consent order. So can you just give us an update on your actions with the consent order as it relates to risk compliance controls and reg data? And if you can elaborate on the reg data part because this current regulatory environment, I don’t know why so much effort needs to go to something that’s more process-oriented, which they’re trying to get away from as opposed to just financial strength. Thank you.

Jane Fraser: Good morning, Mike. So, I do feel good about the progress we’ve made, and as you refer, over two-thirds of our programs are at or mostly at Citigroup Inc.’s target state. Some of the biggest bodies of work are now embedded just into how we run the bank and operate it on a BAU basis. You’ve heard me talk about risk and the progress we’ve made in compliance, and those are two areas where we are largely at the target state and are running through sustainability. But we’re also now at the back end of the working controls. This is a big body of work this year to drive automation and implement more preventative controls. We now have preventive controls for any large and anomalous payments in 85 countries that cover about $13 trillion in payments daily, covering 55 payment apps.

We also have preventive controls covering over 99% of manual payment flows in our institutional businesses. We’ve standardized controls to common processes across the firm, which was very much enabled by the org simplification that we did. We’re now in line with peers in terms of level of automation and preventative controls. All of this work is going to help us implement AI across our process, as I referred to in the earlier remarks. Now, data for regulatory reporting is going to take more time, but we have made significant progress in the last twelve months. Through our own testing, we’re seeing really improved, dramatically improved accuracy for our most critical regulatory reports. We’re also putting in tech and AI-enabled capabilities to ensure we sustain these improvements on a BAU process and basis.

In terms of the regulatory environment, we are clearly seeing in the regulatory environment coming from DC, and I think like everyone, we welcome the proposed changes, including recalibration to center on safety and soundness. For us, we’re on track with what we’re doing across all the programs, including data. We’re focused on getting over the finishing line for our work, and we’re looking forward to the transformation expense coming down next year because as we complete the different bodies of work, the associated expense comes off both as a result of the implementation and from the efficiencies that we’re gaining.

Mike Mayo: And a short follow-up, the transformation expense for 2025, maybe this is for you, Mark, you said it’s going to be more than $3 billion, so it was like $3.5 billion, $4 billion, $5 billion kind of range for that?

Mark Mason: Mike, I’d say it’s a little bit under $3.5 billion in 2025. And again, as Jane mentioned, a lot of work is being put in place to execute on that more efficiently, which is going to help bring that number down in 2026.

Operator: Your next question will come from Betsy Graseck with Morgan Stanley. Your line is now open. Please go ahead.

Betsy Graseck: Hi, good morning.

Jane Fraser: Hey, Betsy.

Betsy Graseck: Jane, I did just want to understand how you’re thinking about the Banamex transaction. I heard all the prepared remarks, and we understand that you prefer to go with the IPO route in ultimate value for shareholders. And I guess I wanted to understand how you’re thinking about the timing between the offers that you’ve received versus the IPO timing that you are planning on executing? And is there a timeframe in mind for ultimate value determination? Thank you.

Jane Fraser: Yeah. First off, I just say, look, the 25% stake is a very significant step in our path towards deconsolidation and ultimately a full exit, which is what everyone is focused on. We firmly believe that this transaction and the subsequent IPO are going to both maximize value for our shareholders and critically have a high degree of certainty around it. Those two have been our North Stars as we’ve been going through this process. I would also just point to the Mexican president and her government, who have been publicly very supportive of this investment and our path forward. That obviously gives us a higher degree of comfort around the certainty of closing. When we look at this path forward, I think the investment by Fernando is a real show of support for Banamex, and we believe his partnership is going to be very valuable as we move towards an IPO, deconsolidation, and ultimately full exit.

There are a couple of big reasons for that. One, he’s a highly reputable business leader with a fifty-year track record of really driving value in his investments, so he’s going to be a strong partner in realizing greater value from Banamex. He also brings a lot of experience and credibility that is very attractive to other investors. His investment alone is a strong endorsement of Banamex’s relevance and potential, and that’s also going to be very helpful as we look at bringing others through the IPO and the like into the mix here.

Betsy Graseck: Okay.

Jane Fraser: In terms of the next steps, the 25% stake requires regulatory approval in Mexico. That typically takes nine to twelve months. For obvious reasons, it makes a lot of sense to get Fernando’s regulatory approval ahead of the IPO. He’s filed his regulatory approval, and it’s already in with the government, so that will go through the process. He’s not dilly-dallying and hanging around on this, I’m delighted to say. We will be ready to move forward once we get those approvals, and we’re not hanging around in terms of getting all the work done for that.

Betsy Graseck: Okay. And the nine to twelve months approval timing, when does that commence?

Jane Fraser: That’s already started because his regulatory approval filing was put in this week.

Operator: Next question will come from Glenn Schorr with Evercore. Hello there.

Glenn Schorr: Morning. I wanted to get to the evolution versus revolution in stable client adoption. I’ve seen some press releases, I’ve seen you join the euro stablecoin banking coalition, and I saw your announcement on Citi Payments Express. I’m assuming you’re making a lot of investments towards this evolution. So I want to take your pulse on what is the pace of stablecoin adoption? How important is it to your traditional banking and payments pipelines? Do you feel like you’re ahead of the curve and you can make more money, not less, as this all plays out? Thank you so much.

Jane Fraser: Yes, of course, Glenn. Look, I want to take a step back on this one because frankly, for our client base, the institutional client base, we see tokenized deposits as delivering what clients need. This is an area that we’ve invested in most heavily. What the clients are after is real-time money movement with minimal to no friction and low cost. As we talked about last earnings call, we’ve been driving innovation around digital assets for many years. What is it our clients want? They want interoperable multi-bank cross-border always-on payment solutions. They want it provided in a safe and sound manner, and they want all the complexities solved for them: compliance, reporting, accounting, tax, AML. That frankly is best done by tokenized deposits.

We are that one-stop shop for our clients. We’re constantly linking in new capabilities, emerging technologies, and we’re bringing in partners. So we offer that holistic killer app for the institutional clients. You saw this earnings call we’re talking about linking our Citi tokenized services to the 24/7 U.S. Dollar clearing network. Now that means we can facilitate transactions across 250 banks in 40 plus markets. That allows clients to frictionlessly transfer funds 24/7 to suppliers and third parties who hold accounts within Citi’s extensive 24/7 U.S. Dollar clearing network. We are seeing demand and adoption increasing, but frankly, the gating factor is our clients’ treasury departments being ready for an always-on environment, and they just aren’t at the moment.

So what does that mean for stablecoin? We will stand ready to support our clients’ needs, whatever they are. We view stablecoin as another option in the overall digital asset toolkit. It’s got more friction because of the on-off ramp. It’s got more friction because of the tax, the accounting, the AML, these other requirements that our tokenized deposit capabilities avoid. But we will continue to provide the on-off ramp solutions for stablecoin exchanges, we will be providing and are providing custodial solutions to crypto assets to our asset manager clients, and we’ll be providing corporate cash management services to the stablecoin providers. We’re about to go live with a number of new capabilities in that, and we’re considering issuing our own TrueCity stablecoin.

But I think there’s an over-focus on stablecoin at the moment, whereas as a major payments player, most of this is going to get solved by the tokenized deposit capabilities.

Glenn Schorr: That was a great full answer. Thank you, Jane.

Jane Fraser: I’m passionate about it. Sorry, Glenn.

Glenn Schorr: I love it. I can’t wait for May. Can we maybe just—this is a super quick follow-up—is you’re fired up about tokenized deposits and what that can mean. Way ahead of that. Does the potential—is there a potential for the tokenization of all securities? Does that change how financial markets operate in general? Just wonder if you could just expand that a little.

Jane Fraser: Yes, absolutely. I was just talking about the payments piece. In the future, clients are going to want solutions that seamlessly offer financing, securities issuance, and settlement in a regulated, trusted environment. As you can imagine, oil, you can imagine equities—this is going to go much, much broader. We will be providing that as part of our toolkit. So that is definitely in the equation here. It’s really terrific that the regulators are now letting us innovate in a responsible way because I think that is going to help the development of the market as we and other banks participate in this space. It will really help scale up.

Operator: Your next question will come from John McDonald with Truist. Your line is open. Please go ahead.

John McDonald: Thank you. I wanted to ask about the efficiency path for next year. It seems like you have some potential tailwinds to drive expenses lower next year, potentially lower severance, transformation spend, and stranded costs. So Mark, I wanted to ask, is that fair that you see a path for directionally down expenses next year even if revenues are strong? And do you still see the potential to exit next year at an efficiency ratio below 60?

Mark Mason: Thanks, John, and good morning. I’d point to a couple of things as we think about 2026, and I’d just remind you and others that we’re targeting an ROTCE of 10% to 11% next year. It’s important that we continue to show progress in our returns across the franchise. The second thing I’d point to is that if I just kind of go back to where we are year to date for a second, we are demonstrating strong top-line momentum. The year-to-date revenue is up 7%, and if you look at our expenses against that, leaving out the goodwill impairment, our expenses were flat. So we’re showing very strong top-line momentum and very strong discipline around managing our expense base. As I think about 2026, that has to continue for us to deliver on the 10% to 11%.

That is to say, continued top-line momentum, and I’ve given obviously it’s more of what you’ve seen through the year-to-date performance and continued expense discipline. That expense discipline is going to consider at least two things. One, are the greater efficiencies that we’ve talked about in the past. You’ve mentioned some of those, the transformation expense coming down, the legacy/slash stranded costs continuing to come down, productivity from BAU activity, I’ve mentioned in the past a lower severance and more normalized severance. But it’s also going to require investments in order to continue to fuel that top-line momentum. So investments, one that’s tied to those higher revenue levels, but also continued investments in parts of the franchise like banking and parts of the franchise like services.

You just heard Jane mention the investments we’re making in token services. Striking that right balance so that we are not only delivering 10% to 11% but north of that beyond 2026 is really important. So what does all of that mean? That means as I think about 2026, I lead with the 10% to 11%. I follow on by productivity and the need for investments. I’m targeting the less than 60 as I come out of 2026 or in 2026 as I’ve said before.

John McDonald: Great. That’s really helpful. Then just a quick follow-up. Thinking a little bit longer term, what’s the ultimate end state for the $3.5 billion or so in transformation spend? Does it go away? Does it morph into kind of a regular BAU investment spend at some point? And how does that evolve over time?

Mark Mason: I’m smiling here, John, because I knew as soon as I shared the number, the very next question would be what happens with it, right? I think as I mentioned, it’s going to come down in 2026 for all the reasons we’ve mentioned, including making significant progress on the transformation. We’ll obviously share more with you in terms of where the expense base is going and the transformation expenses are going beyond that at Investor Day. So I’ll ask you to kind of stay tuned as it relates to that. But I don’t want to miss the opportunity to state again that in order for us to get to the improved returns beyond 2026, we’ve got to have that right balance of squeezing out as much as we can in efficiencies and redeploying so that we can capture growth and upside as we serve our clients beyond 2026.

Jane Fraser: And I encourage everyone just to look at the track record we’ve got. I mean, we’ve been consistently growing revenues whilst investing in the transformation, whilst investing in the businesses. At the same time, we’ve been keeping the expense base at a low and very disciplined level. That’s a discipline you can expect to see us continuing.

Operator: Your next question will come from Jim Mitchell with Seaport Global. Your line is open. Please go ahead.

Jim Mitchell: Hey, good morning. Mark, maybe just a question on NII. I think based on the guidance for this year, it seems like you’re flat to up in the fourth quarter. As you guys have pointed out in your Qs, you have limited sensitivity to U.S. Dollars. So is 4Q a decent jumping-off point for next year? Can you grow from that level? How should we think about the puts and takes around asset repricing and balance sheet growth and headwinds from rates?

Mark Mason: Yes. What I’d say is a couple of things. One, I do expect to see continued growth in NII as we go into 2026 at this point. We’re obviously putting together our operating budgets now, but I do anticipate continued growth. I think there are a couple of drivers, many of which have played out through most of the year here. One is, I expect that we’ll see continued growth in deposits. Operating deposits, deposits on our retail banking side, both of which have shown up quite healthily in the quarter. I expect that to continue. I expect to see continued loan momentum, particularly on the branded card side, but also in the trade lending activity, which also showed up very nicely this quarter. I’d expect that the investment portfolio that you’ve heard me talk about before will continue to roll off and mature, and we’ll be able to deploy that yet still at higher rates in cash and other securities as we go through 2026.

The final piece is, obviously, I would also expect that there’d be more rate cuts, and the discipline around pricing and the importance of us reminding our clients that our offering is a lot more than just holding their deposits will help to mitigate some of that pressure. When I put all of that together, I do see continued growth in NII, perhaps not at the same pace, but certainly continued growth ex-markets as I go into 2026. I hope that helps a little.

Jim Mitchell: No, that’s very helpful. Maybe just on the capital target of 12.8% and stepped-up buybacks this quarter. Is this a pace we should expect until you get to 12.8%? Just sort of curious on your thoughts on how quickly you get to 12.8%.

Mark Mason: I’m smiling again, Jim, because the last quarter I said that we weren’t going to give guidance on a quarterly basis as it relates to buybacks. I want to stick to that. But I would remind you that we do have a $20 billion buyback program that’s out there. We’ve been making good progress against that. We’ll continue to make progress against that. 12.8% is what we will target from a CET1 ratio, and I think you’ll see that come 13.2% come down towards that over the next couple of quarters. We’re going to strike the right balance between deploying capital back into the business at accretive returns in order to continue to drive growth that improves returns and returning capital to shareholders, particularly given where we’re trading.

While we have seen good performance in the stock over the course of the year, we’re still adding around kind of one times tangible book value. I think there’s more upside to the stock, and so we want to strike that right balance between return on and return up.

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

Erika Najarian: Hi, good morning. My first question, Mark, is just wanted to make sure I understand all of the technical nuances that you laid out on Slide sixteen. So the CTA impact is essentially neutral at deconsolidation. In addition, we should get the capital release from the RWA reduction. I think it’s $27 billion from the Mexican financial statements. Any gains and losses on sales. So the CTA is separately capital neutral, but the ultimate capital benefit will be determined by that capital release and the ultimate valuation of Banamex. If I’m understanding that correctly, what is the allocated TCE to Banamex?

Mark Mason: Sure. Let me just kind of clarify one point. I think you’ve largely got it, which is there’s an important distinction between deconsolidation and full exit. The deconsolidation, as you point out, will trigger that CTA flowing through the P&L, and ultimately that will be capital neutral. So that is absolutely correct. At the full exit, what we would expect in the way of the capital impact will be the capital associated with the risk-weighted assets and the gain or loss, the cumulative gain or loss on sale. The capital associated with the risk-weighted assets, the risk-weighted assets, is about $37 billion. So you can kind of run the math of 13.2% against the $37 billion and get a proxy for how much capital we have allocated here.

Erika Najarian: Perfect. My second question is for Jane. Jane, your reward for all the improvement that you’ve shown is a higher bar, right? I think that’s what you’re seeing, and we’re all looking forward to this May Investor Day. I guess this is a two-part question. As you approach the 10% to 11% return on tangible common equity goal for next year, and you think about being two-thirds of the way done with that transformation, is May the right time to address maybe more end-state capital targets the way JPMorgan has addressed and Wells also gave us an update today? If we get more regulatory certainty, you’ve obviously gotten a lot of volatility in the past from stress test results. Especially as we think about deconsolidating and fully exiting Banamex and the regulatory momentum, is 100 basis points still the right buffer for this company as we look forward?

Jane Fraser: Well, a lot in that. Let me just try and pick a few pieces of it. So I’ve always been clear, the 10% to 11% ROTC target is a waypoint, not a destination. In May, as I talked about earlier, we see a lot of different areas of upside. Mark talked about some of the different areas earlier in the call on the revenue growth dimension. So we’ll lay out what we see for the different businesses, what is the path forward, and therefore what the longer-term target that we’re expecting to see. In terms of the regulatory environment, I think we’re very happy to see a lot of the proposals getting more clarity. We saw ESLR coming through. We would expect to see GSIB, Basel III, CCAR with much more clarity in the first quarter.

So that will be good timing for being able to lay out what that means for the May Investor Day, assuming that remains at pace. Obviously not in our hands as the timing around it. So I think you will end up with much more clarity about what that—what is the end state if there ever is an end state. Mark, why don’t you jump in?

Mark Mason: Yes. The only thing I’d add to that is, with the progress we’re making in executing on the strategy, I’m sure you’ve noticed that we’re generating a more steady and predictable earnings stream and on top of that growing our earnings. That in part has shown up in the stress capital buffer reduction that we’ve now seen for two years in a row. Now we have to get clarity on kind of how that’s going to be applied, whether it will be averaging or not. But I highlight that we’re going to continue the work and how we’re running the franchise in order to improve and therefore continue to reduce what happens in a CCAR stressed analysis. The other piece that I’d highlight is there are obviously other aspects to the environment that are still in flux, although they look like they will be favorable.

GSIB, the Basel III endgame, etcetera, and by the time we get to May, we hope to have clarity on that, which can therefore inform how we think about the future. As it relates to the management buffer, you heard me mention repeatedly that we look at that all the time. We’re constantly looking at everything from the certainty we’re getting in the regulatory capital requirements, and that’s improving as we mentioned before, to how we think about internal stress analysis and the volatility in RWA and the like. So we’ll continue to look at that and look for opportunities where it makes sense to reduce that, and we’ll share that if and when we get to that conclusion.

Operator: Your next question will come from Ebrahim Poonawala with Bank of America. Your line is open. Please go ahead.

Ebrahim Poonawala: Good morning.

Mark Mason: Good morning.

Ebrahim Poonawala: I guess good afternoon at this point. Just a quick question, Mark. You talked about credit reserves and the unemployment rate that you have there. But just talk to us when we think about—and I think Jane said like some softness in the economy—when we think about the consumer cards book, expectations, any kind of red or yellow flag that you’re seeing there? If you don’t mind addressing—like I’m looking at sort of the non-accrual loans, a pretty decent jump in sort of corporate non-accruals quarter over quarter, like was that a one-off? Do you expect that as some of the sort of, I guess, banking book seasons? Would love some perspective there.

Mark Mason: Sure. Let me start with that piece, and then we can come back to the consumer. We did see a tick up in NALs in the third quarter. The quarter-over-quarter increase is really driven by two idiosyncratic downgrades. I’d say the NALs represent a relatively small percentage of our funded loans. When you look at the percentage there, you can see on the page it is a small number. We’re well reserved against from a coverage point of view. So the NAL reserve coverage remains adequate at over two times, and in many cases with sufficient collateral and some upgrades expected. So I think that while the number is large in terms of the increase, we could really point to two idiosyncratic names as the major driver and take some comfort in the NAL as a percentage of funded loans remaining low in the quarter.

We’re obviously watching this very closely, but again, with many of these still paying, we feel good about our exposure at this point. In terms of consumer, I’d point to a couple of things. So one, the losses that we’ve seen in the quarter are inside of the ranges that we’ve given both for the branded card portfolio as well as for the retail services portfolio. I think consumers are being very discerning in terms of how they spend. The spend increase that we’ve seen is largely in branded and has tended to be in the higher-income consumers. I think importantly, when I look at the delinquency trends, the delinquency trends are also performing in a very normal fashion. In terms of early buckets, I’m not seeing any signs of a change in that direction or in that normalcy.

So as I look at our book, I’m very comfortable with our exposure. I’m very comfortable with the reserves that we have. I’m very comfortable, frankly, with some of the actions we took a year plus ago as we looked at how we wanted to underwrite consumers. I think that has afforded us some of what we’re seeing here. I’m still very cautious. We’re running our operations in a recession-ready mode. We’re watching NIM payments in order to get any early signals of stress. But again, as I look at the book, I feel comfortable with where we are and where our consumers are trending. Jane, you may want to add to that.

Jane Fraser: Yes. I think one of the things I point to everyone is the advantage of our strategy. If you look at our consumer customers, 85% of them are prime. If you look at our corporate customers, we’ve got a pretty pristine blue-chip portfolio. We moved from serving millions of clients internationally to a few tens of thousands. That affords us to have focus on them, a real understanding of them, a depth of diligence around them, and that is very beneficial. We’re very disciplined in our credit assessments, in our client selection, in our concentrations, in our hedging, and in our sell-downs. So I look at an environment where you’ve had a sizable run-up in the markets, despite tariff and other headwinds, it could well be a correction at some point. But I feel very good about how we will be positioned around that. We have a very fiscally disciplined consumer base and, as I say, a very prime one. So we’re ready for whatever the environment is and well-positioned.

Ebrahim Poonawala: That’s helpful. Thank you both. I guess just one—we could get a mark to market on the wealth business, Jane. When I look at sort of the year-over-year operating leverage being meaningful, revenue growth was an expense growth. But again, a lot of that driven by NII. Just talk to us in terms of if the low-hanging fruit has been picked in terms of what Andy is doing in that business. What’s the outlook from here, both in terms of just how you think operating leverage and ROTC improving?

Jane Fraser: Yes. Thank you. No, I think this quarter is another good one for Wealth in terms of good strong revenue growth at 8%, the improvement in the ROTC, the sixth consecutive quarter of positive operating leverage. I think the piece we were particularly pleased about was the $18.6 billion of net new investment assets. This is a direct result of the strategy we’ve been implementing over the past couple of years that you can expect to continue. It centers on becoming the lead investment advisor for our client. That is the center of the strategy. What we’ve been doing, we’ve been strengthening the CIO research product. We’ve been retooling key areas of the investment product platform. You’ve seen us aligning behind open architecture as a key operating principle.

We’ve been deepening our partnerships with top-notch third-party asset management firms. All of this is helping us drive up the investments fee revenues and executing across this famous $5 trillion of opportunity we have with our existing clients. We’re also elevating collaboration between USPB banking and markets. We’re seeing some very strong two-way referrals between each of these different groups. That again supports our growth in net new investment assets and revenues in Wealth overall. We’re deploying new AI capabilities, and that’s also getting great early feedback. We’ve got Ask Wealth, which is a GenAI-powered inquiry engine that’s handling thousands of client and service questions with rapid update. We have advisor insights, which was launched with very strong early adoption that delivers personalized data-driven engagement opportunities for advisors.

We had a 75% usage rate on that, so a lot of advisor demand. What all of this means is this is driving our long-term objectives of becoming the lead investment adviser for our clients with a long runway ahead of us as we scale up the business. We will just continue. We will continue to have good expense discipline. We’ll be focused around how we use the balance sheet in the context of the overall client relationship. You can see from the numbers we’ve come a long way, but there’s just more work to do, but there’s just enormous upside as we go, we scale up, and that scaling is all in our control. I hope that gives you a sense of what are the different elements.

Ebrahim Poonawala: Thank you.

Operator: Your next question will come from Ken Usdin with Autonomous Research.

Ken Usdin: Thanks a lot. Just a quick one on the expense side, Mark. You mentioned the sub-sixty-four efficiency ratio for the year, just looking in the deck, it looks like the year-to-date has been 62. You typically do have a little bit of a higher exit on that. Just wanted to ask you just what should we be thinking about as far as fourth-quarter expenses versus the 13.6% in the third quarter ex the impairment charge in terms of the seasonality, the expected kind of downdraft in trading that you mentioned earlier, and the other pieces on the severance and such? Thanks.

Mark Mason: I think the couple of things I’d point you to. One is the FX impact, which you can see in the back of the deck on page 26. You can see that’s going to contribute to the 53.4% that we have out there to the tune of probably close to $400 million. That obviously—or should say obviously—it is going to likely be EBIT neutral, but that’s certainly the headwind to think about as you think about how much higher the 53.4% might be. The other piece to think about is the performance. So what we assume in terms of how much higher than the $84 billion, if you include FX, how much higher that might be will be the other factor that drives the expenses up above the 53.8% if you will, right. I’ve already guided towards NII ex-markets being up around 5.5%, that obviously is going to contribute to whatever the number is north of the 84 we have on the page.

On the markets piece, again, I’ve given you some context for what we’ve seen historically. But given the strong quarter here, you have to make an assumption in terms of how much sequential decline we might see in the fourth quarter. I think those are the puts and takes, really how much higher we are than the 53.4% as a byproduct of FX and outperformance on the top line. Everything else we’ve been very disciplined about as it relates to the expense targets that we set.

Ken Usdin: Okay, got it. Right. Thanks, Mark.

Operator: Your next question will come from Gerard Cassidy with RBC.

Gerard Cassidy: Hi, Mark. Hi, Jane.

Mark Mason: Hey, Gerard.

Jane Fraser: Hey, Gerard.

Gerard Cassidy: Can you share with us—I think in your second quarter Q you gave us the interest sensitivity of the balance sheet, and obviously we’ll see it in the third quarter. If I recall, I think a 100 basis points instantaneous change in rates, you guys guided that NII could decline about $1.7 billion. But if we just see the Fed and say the long end of the curve stays anchored around 4% to 4.5% and the Fed cuts another 50 basis points in the next three months or so, how does that impact your net interest income for over the next six months or so?

Mark Mason: I think the simple way to think about it is what I shared in the second quarter was for total U.S. and non-U.S. Dollars, and it was a drag of about $1 billion or 100 basis point decline across all currencies and across the curve. When you break that down, Gerard, it’s only about $400 million in the U.S. Dollar, right? That’s again for assuming a parallel shift across the curve 100 basis points. We’ve been working to bring that down further. We’ll report a number in the third quarter Q, and you’ll see that number coming down. I don’t want to disclose it this way, but coming down from the negative $400 million. So you can kind of do the math on that. Again, that’s the parallel shift. It’s not that different if you were to look at kind of just on the overnight rate change. Most of our short-term exposures are out in the non-U.S. Dollar. So hopefully that helps, but you can see the number is relatively small and declining, assuming the 100 basis point.

Gerard Cassidy: Very good. Thank you. Then as a follow-up question, there’s been a lot of discussion on other calls today and among investors about loans to non-depository financial institutions, especially since when you look at the industry, it’s more than doubled in about five years, and rapid loan growth is always something we want to pay attention to. Can you—and you guys have, according to the regulatory filings at the end of the second quarter, about $104 billion here—can you give us some color or insights into the different lines that you lend into? How comfortable you are with this credit? Thank you.

Mark Mason: Sure. So the first thing I’d point out is that this MBFI disclosure that all the banks do in the Y9C consists of a very broad set of exposures. It includes private credit, but it is very broad. The second point I’d make is that it’s primarily made up of securitization exposures with diversified collateral pools. So there’s some consumer-related mortgage, credit card, audit. There’s some corporate-related that includes the private credit or broadly syndicated. There’s some commercial real estate. All of that is kind of captured in this MBFI category. Overall, I would say the MBFI exposure is predominantly investment grade. So that’s a consistent theme for us as a firm. Certainly is the case as it relates to how it’s reflected in this disclosure.

That means we’re working with top-tier asset managers that are sponsors for private credit or established consumer platforms. We’re maintaining collateral pools that are well diversified with concentration limits. We’re ensuring that there are structural protections, including ample subordination, that helps to result in the high investment grade attachment point. We’re monitoring all the underlying collateral, and we have transparency at the loan-by-loan level. So when I kind of take a step back and look at that, we’re very selective from a risk perspective as to how we play across all of these subcategories, but particularly as it relates to private credit. I think the key takeaway is that that category is very broad.

Operator: Your next question will come from Scott Siefers with Piper Sandler. Your line is now open.

Scott Siefers: Good afternoon, everybody. Thanks for taking the question. Turning to market, I was hoping you could expand a bit on the strategy in the card portfolio. I think with the Strata Card, you all left the impression that Citi is becoming a more visible competitor near the upper end. So is there a sort of conscious change in the complexion of the card portfolio overall that we should expect to see evolve over the few years? Or is this more just that you’re kind of layering on a product that was a bit of a gap previously? What’s the best way to think about that?

Jane Fraser: I think the first thing you center around is we’re a leader in payments and lending today. Top three rank with the U.S. Card balances. We’re growing our position by launching competitive innovations and new capabilities. As you see, you’ve seen a considerable expansion in our branded cards products and offering suite this year. We reentered the premium rewards segment with the Citi Strata Elite that’s had a very strong reception in the market. We refreshed the value proposition in the Costco portfolio. We’ve begun to roll out the new and very unique, pretty exciting capabilities, thanks to our partner with American Airlines, like the Points Transfer with our branded card portfolio and our own proprietary cards. As I have hinted, the team will shortly be announcing additional new offerings, in particular as we expand our partnership with American Airlines.

I think you can expect to see more growth in the co-brand space versus the private label space. We’re also investing significantly in AI capabilities that help us better serve our customers, also manage risk better, and drive efficiencies. So I think in all of this area, you’re seeing us very much on the front foot, building out the ecosystems around our cards capabilities and being at the forefront of a lot of the innovation in AI and the like, applying it for our clients’ benefits and for the shareholders’ benefits. I’m excited by what we’ve got coming up. We’ll also have the acquisition of the Barclays portfolio in the second quarter next year, which will be a nice boost to the scale of the franchise as well. Lots of good stuff going on.

Scott Siefers: Yes. Perfect. Okay. Thank you very much for the color.

Operator: Your next question will come from Chris McGratty with KBW.

Chris McGratty: Great. Thanks for the question. Building on Ebrahim’s question, on Slide four on operating leverage. You touched on wealth, Jane. Was helpful. Can you speak to the sustainability or perhaps source of improvement in operating leverage by segment as you near the 10% to 11% goal for ROE next year?

Jane Fraser: Well, as we look at it, it’s fairly simple in terms of services, as we say. We continue to grow the fee revenues, we’re continuing to grow the volume, acquiring new clients and existing clients. I’m also on the market side. You’ve seen us be very disciplined there, where we’re looking at the revenue growth potential that comes particularly in prime. You’re seeing us in financing and in securitizations, it’s helping. Wealth, we talked about in USPB, it’s going to be the growth coming partly from the market, from the Barclays portfolio, as well as from the product innovations and really driving customer engagement as well as new customers, as well as bringing new customers in. Then you’ve got synergies across the businesses like the Alpha Alpha Trades, we’re staying between markets and banking, two-way referrals that we were talking about between wealth and other businesses and the like.

Then Mark laid out, I think, very succinctly, the efficiencies that we’re going to continue to be driving on the operation efficiency side. So I think you’ve got a story of both revenue growth, investment in the businesses, and as Mark said, continued productivity improvement, and they’ll be common across the board.

Mark Mason: Yes. I think you can expect, obviously, we are targeting positive operating leverage for the full firm in 2026. You should expect that across most of the segments. If you don’t see it in a segment, it’s likely because we’re leaning in on investments there. But generally speaking, the positive operating leverage for the full year, we should continue to see good momentum there. So we’ll give you more color on that at the Investor Day in terms of how we think about it. But with all of these businesses driving improved return in 2026, that’s likely to be how it plays out. I’ll be careful on the quarterly look at that. For example, our markets business, for example, in the fourth quarter, where we see downward pressure on the top line, there could be a quarterly dynamic there.

But again, I’d point you to a really strong year to date across every one of these segments. As the chart points out, consecutive quarters of positive operating leverage, and I’ll just remind you that continued top-line momentum we certainly expect, but the need to invest is what’s going to drive those improved returns beyond 2026.

Chris McGratty: That’s very helpful. Thank you.

Operator: Your final question will come from Mike Mayo with Wells Fargo. Your line is now open.

Mike Mayo: Hi. One more for Jane. Do you balance between celebrating wins and ensuring your team keeps the intensity on for all the hard work ahead? I guess it’s—I heard a story that people are celebrating when the stock hit $100 a share, which I can understand you met recent targets, made progress, but the transformation, you have a new team in place. But for those who’ve been around for a long while, we wouldn’t want you to miss the forest for the trees. The returns are still under 10%. Efficiency is still over 60%, the stock still has underperformed this decade. So I just thought that sort of celebration may have been premature, but you do want to celebrate the win. So how are you ensuring that intensity remains at Citigroup Inc.?

Jane Fraser: Okay. It was a milestone moment, first. An important one for everyone as we go down this journey. To me, it’s always—there are waypoints and there are destinations. The destination is the one that we’re excited about. As I said at the top of the call, there is tremendous upside ahead for us. We’re very motivated by the opportunities that are ahead of us. I’ve got a long list of them by the different businesses. We can’t wait to tell that story at the Investor Day by each of the businesses and for the firm overall because all these different elements come together. But there isn’t, I think, a single person in our firm that feels that we are declaring victory. We’ve still got a long way to go. It’s great to have the momentum behind us. It won’t be a linear path, but we are really excited to be so laser-focused on the opportunities and the upside that still remains and relentless in our execution against them.

Mike Mayo: All right. Thank you.

Operator: There are no further questions. I’ll turn the call over to Jennifer Landis for closing remarks.

Jennifer Landis: Thank you very much for joining us. Please reach out if you have any follow-up questions. Thank you.

Operator: This concludes Citigroup Inc.’s third quarter 2025 earnings call. You may now disconnect.