Citigroup (C) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $3.2B ($1.51 EPS), down 9% year-over-year, on revenues of $20.3B, up 1% reported and 3% ex-divestitures, with growth across all core businesses except All Other.

• Expenses decreased 2% year-over-year to $13.3B, reflecting organizational simplification and cost reductions, despite continued transformation investments.

• Transformation progress included closing the 2013 BSA/AML Consent Order, retiring 450 legacy applications YTD, and launching new operational tools.

• Returned $2.1B to shareholders via dividends and buybacks, with a payout ratio of 71%.

• Record Services performance, strong Equities in Markets, share gains in Investment Banking, and continued growth in Wealth and US Personal Banking.

Financial highlights

• Revenues were $20.3B, up 1% year-over-year and 3% ex-divestitures; net interest income declined 3% to $13.4B, non-interest revenue rose 10% to $7.0B.

• Net income fell 9% to $3.2B, mainly due to a 45% increase in cost of credit to $2.7B, driven by higher card net credit losses and ACL builds.

• Operating expenses declined 2% to $13.3B; efficiency ratio improved to 65%.

• Book value per share rose 3% to $101.91; tangible book value per share up 3% to $89.67.

• End-of-period loans grew 3% to $689B; deposits up 3% to $1.3T.

Outlook and guidance

• On track to meet $80-$81B full-year revenue guidance and full-year expenses at the higher end of $53.5-$53.8B, excluding FDIC special assessment and civil money penalties.

• Medium-term targets: 4-5% revenue CAGR, efficiency ratio below 60%, and ROTCE of 11-12%.

• Banamex separation expected in Q4 2024, with IPO readiness targeted for end of 2025, subject to market conditions.

• Expects continued elevated consumer net credit losses in Q4 2024; Branded Cards NCL rate expected at 3.50-4.00% for FY24, Retail Services NCL at 5.75-6.25%.

• Transformation investments and regulatory compliance efforts to continue into 2025.