Citigroup profit hit by Russia charge as dealmaking and services shine

[NEW YORK] Citigroup’s profit fell 13 per cent in the fourth quarter as it booked a US$1.2 billion loss tied to the sale of its Russia business, offsetting higher revenue from dealmaking and services to corporate clients.

Earnings slid to US$2.5 billion, or US$1.19 per share, in the three months ended Dec 31, the third-largest US lender reported on Wednesday (Jan 14). This is compared with US$2.9 billion, or US$1.34 per share, a year before.

The lender’s board approved the sale of its Russian unit, AO Citibank, to Renaissance Capital last month, resulting in a pre-tax loss of about US$1.2 billion, largely related to currency translation.

Citi shares were down 0.7 per cent in premarket trading after the results.

Citigroup’s return on tangible common equity was 5.1 per cent in the fourth quarter, far short of its 10 to 11 per cent target for next year. Excluding the Russia loss, the return was 7.7 per cent.

Wall Street banks benefited as mergers and acquisitions (M&A) picked up late last year. Activity rebounded in the second half, after tariff announcements weighed on markets in the first half and the US government shutdown delayed deals.

Renewed corporate confidence and a more accommodating regulatory backdrop prompted companies to strike deals, lifting fee income for lenders advising on mergers and capital raisings.

Citigroup’s investment banking fees rose 35 per cent to US$1.3 billion, up from US$951 million a year earlier.

“2025 was a year of significant progress, as we demonstrated that the investments we are making are driving strong top-line growth,” said chief executive officer Jane Fraser.

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Industrywide global investment banking revenue rose 15 per cent from a year earlier to almost US$103 billion, the second-highest after 2021, data from financial services company Dealogic showed.

Citigroup earned the fifth-highest fees across banks over the same period.

Analysts expect the deal momentum to extend into the new year, helped by lower interest rates and a more accommodating regulatory backdrop.

Revenue in Citi’s banking unit climbed 78 per cent to US$2.2 billion in the fourth quarter, and the bank posted a record M&A performance in 2025.

Trading shines in 2025

The markets remained volatile in the fourth quarter as investors speculated about a potential bubble in artificial intelligence stocks, the US Federal Reserve’s interest rate path and geopolitical tensions.

Citi’s total markets revenues fell 1 per cent in the quarter to US$4.5 billion, driven by fixed income and equities. Its markets revenue grew 11 per cent for the full year in 2025 from 2024.

Market swings often boost trading income at banks as the clients reposition portfolios.

Meanwhile, net interest income, the difference between what a bank earns on loans and pays out on deposits, rose 14 per cent in the fourth quarter.

While the lower interest rates can weigh on net interest income, they can also spur demand from borrowers.

Citi’s shares gained 65.8 per cent in 2025, outperforming its peers and an index tracking bank stocks by a wide margin.

The bank has bought back US$13.3 billion in stock last year, and although its shares still trade at a discount to rivals, it has narrowed the gap.

Fraser carried out a sweeping reorganisation and reduced headcount. The lender is set to cut about 1,000 jobs this week, a source said on Jan 12.

Rival JPMorgan Chase beat estimates for its fourth-quarter profit on Tuesday, while the Bank of America and Wells Fargo reported higher quarterly profits. REUTERS