Citigroup reported second-quarter revenue of US$24.8 billion, exceeding analysts' expectations of US$23.7 billion. Earnings per share came in at US$3.15, well above the consensus estimate of US$2.73.

The bank's equities trading revenue surged 45% year-over-year to a record US$2.3 billion, approximately 11% higher than the previous quarterly record set in the first quarter of this year.

Citigroup is continuing to expand its equities trading franchise by attracting more hedge fund clients, although the business remains smaller than those of the largest Wall Street competitors. The bank's net interest income reached US$17.1 billion, beating market expectations of US$16.0 billion, while rising 9% quarter-over-quarter and 13% year-over-year.

According to Tuesday's earnings report, four of Citigroup's five major business segments—Banking, Services, Markets, and Wealth—exceeded investor expectations.

Like other major U.S. banks, Citigroup's investment banking division recorded its strongest quarterly revenue since 2021, when pandemic-driven market volatility and ultra-low interest rates fueled industry-wide trading activity. Since Vis Raghavan took over the division in 2024, the management team has been undergoing significant restructuring.

The results mark the first earnings report since CEO Jane Fraser unveiled new long-term profitability targets in May, and investors generally welcomed the company's strategic direction. As Fraser continues to streamline Citigroup's global operations, the bank's share price has nearly doubled over the past 18 months.

During the company's May Investor Day, Fraser projected that Citigroup's tangible return on common equity (ROTCE) would reach 14%–15% by 2031. In the second quarter, the bank achieved a 13% ROTCE, outperforming analysts' expectation of 11.3%.

The strong performance provides additional momentum for Citigroup's multi-year turnaround. Last month, the bank also received public praise from U.S. President Donald Trump on social media. Trump's son, Eric Trump, recently established a trust account at Citigroup using family assets. Fraser has continued working to strengthen the bank's relationship with policymakers in Washington.

Citigroup's consumer credit card business came in slightly below expectations, as severance costs contributed to a 10% year-over-year increase in expenses. The division is currently restructuring parts of its workforce while integrating the American Airlines co-branded credit card portfolio acquired from Barclays.

Market Insight:

Although Citigroup delivered results that broadly exceeded expectations, its 45% growth in equities trading revenue still lagged behind larger Wall Street rivals. During the same period, JPMorgan Chase reported 86% growth, while Goldman Sachs posted a 72% increase.

On the positive side, Citigroup's efficiency ratio improved to approximately 57%, narrowing the gap with more profitable peers. For comparison, JPMorgan reported an efficiency ratio of 54% in the first quarter, highlighting Citigroup's continued progress in improving operational efficiency.