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Citigroup (C) reported mixed Q4 results, beating Q4 EPS expectations but falling short on revenue. However, the bank's overall performance remained solid, highlighted by a 14% increase in reported net interest income (NII), which reached $15.7 bln, driven by strength across all primary business lines.

• Revenues for the quarter totaled $19.9 bln, a 2% reported increase, though up 8% when excluding a $1.2 bln notable item related to the "held for sale" accounting treatment of the plan to sell AO Citibank in Russia.
• Banking revenues delivered a blistering yr/yr growth of 78% to $2.2 bln, far outperforming industry peers like JPMorgan Chase (JPM), whose investment banking unit saw a 5% decline in fees for the same period.
• The Banking segment's robust performance was fueled by a 35% jump in Investment Banking fees and a nearly 200% increase in Corporate Lending revenues when excluding the impact of loan hedges.
• Services revenue climbed 15% yr/yr to $6.2 bln, supported by an 18% rise in NII from higher rates and average balances, alongside a 10% increase in non-interest revenue from strong cross-border transaction volumes.
• Wealth revenues grew 7% to $2.4 bln, led by gains in Citigold and the Private Bank, while U.S. Personal Banking (USPB) saw a 3% increase to $5.1 bln, driven by Branded Cards and Retail Banking.
• Markets revenue remained relatively flat, down 1% yr/yr at $4.4 bln, as record prime brokerage balances were offset by slightly lower activity in Fixed Income and Equity Markets.
• Credit quality metrics remained healthy, with net credit losses decreasing 2% to $2.19 bln.

Briefing.com Analyst Insight:

Citigroup's Q4 results reflect a bank in the midst of a complex but increasingly visible turnaround. While the revenue miss and the significant charge related to its Russia exit created some noise, the underlying performance of its core "interconnected" businesses - specifically Banking and Services - is highly encouraging. The 78% surge in Banking revenue is particularly noteworthy, suggesting that Citi is successfully gaining "wallet share" in M&A and leveraged finance even as some competitors lose momentum. Looking ahead to FY26, Citigroup’s guidance for 5-6% growth in NII (excluding Markets) suggests confidence in its ability to leverage loan growth in Cards and Wealth and deposit growth in Services. Furthermore, management’s aggressive cost-cutting and organizational simplification appear to be bearing fruit, with 80% of transformation programs now at or near target state.