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Date

Wednesday, Jan. 14, 2026, at 11 a.m. ET

Call participants

  • Chief Executive Officer — Jane Fraser
  • Chief Financial Officer — Mark Mason
  • Head of Investor Relations — Jennifer Landis

Takeaways

  • Adjusted EPS -- $1.81 reported, excluding the Russia notable item, with corresponding adjusted ROTCE of 7.7%.
  • Adjusted net income -- $3.6 billion for the quarter; full-year adjusted net income reached $16.1 billion, up 27%.
  • Adjusted revenue growth -- 8% year over year, with total adjusted revenues of $86.6 billion, the highest in over a decade.
  • Firm-wide positive operating leverage -- Achieved in all five businesses and at the group level for the second consecutive year.
  • Efficiency ratio -- Improved to 63% on an adjusted basis; management targets around 60% for the upcoming year.
  • Services segment performance -- Revenues up 8%, with ROTCE of over 28% for the year; assets under custody and administration increased 24%.
  • Markets revenue -- Record annual revenue, with full-year ROTCE of 11.6%; fixed income up 10% despite commodity headwinds, equities revenues at $5.7 billion, and prime balances up over 50% for the year.
  • Banking segment -- Record investment banking fees, up 35%; M&A revenue up 84%; delivered 11.3% ROTCE for the year.
  • Wealth segment growth -- Revenue up 14%, organic net new investment assets up 8%, client investment assets up 14%, and full-year ROTCE above 12%.
  • US personal banking (USPB) -- Returns more than doubled for the year, with a full-year ROTCE of 13.2%; branded cards revenue up 8%, driven by customer spend and acquisition.
  • Capital return -- Over $13 billion in common share repurchases for the year; total capital return exceeded $17.5 billion, with CET1 ratio at 13.2% (160 basis points above regulatory requirement).
  • Expense trends -- Adjusted expenses (excluding Banamex impairment) at $54.4 billion, with drivers including higher compensation, technology, and benefits, partially offset by productivity savings and reduced deposit insurance costs.
  • Cost of credit -- $2.2 billion in the quarter, mainly from U.S. cards net credit losses; total reserves over $21 billion; reserve-to-funded loan ratio at 2.6%.
  • Share repurchase outlook -- “We are still targeting a 100-basis-point management buffer” above regulatory capital minimum, indicating intent to continue buybacks in 2026.
  • Transformation progress -- “Over 80% of our programs are now at or nearly at our target state,” as noted by Fraser, with the OCC terminating Article 17 of the related consent order.
  • AI integration -- Adoption rate above 70%, with proprietary AI tools used over 21 million times by staff in 84 countries.
  • International divestitures -- Signed agreement to sell Poland consumer business, closed sale of 25% Banamex stake, and final approvals in process to exit Russia.
  • 2026 outlook -- Net interest income excluding markets expected to grow 5%-6%; management aims for continued positive operating leverage and efficiency improvements.
  • Management transition -- Mark Mason’s final earnings call as CFO, with succession by Gonzalo [last name not specified in transcript].

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Risks

  • Expenses increased 6% year over year to $13.8 billion in the quarter, attributed to increases in compensation and benefits, tax charges, legal expenses, as well as technology.
  • Retail services revenues were down 7% for US personal banking, mainly driven by lower interest-earning balances and lower loan spread.
  • Corporate other revenues declined due to lower NII from a lower benefit from cash and securities reinvestment, highlighting asset sensitivity management amid a declining rate environment.
  • Delinquency and net credit loss rates in US cards continue to perform in line with management expectations, but NCL ranges for cards are maintained to provide cover around potential macro uncertainty.

Summary

Citigroup (C +4.14%) reported record adjusted revenues and robust adjusted net income growth, emphasizing firm-wide positive operating leverage and improved efficiency. Management highlighted progress on strategic transformation initiatives, with 80% of programs at or near target state and concrete steps in global divestitures. The call detailed a continued capital return focus, including policy for buffer management and plans for ongoing share buybacks in 2026.

  • Jane Fraser said the OCC's termination of Article 17 of the consent order reflects external validation of operational improvement and regulatory progress.
  • AI-driven process improvements have exceeded 70% adoption among staff, supporting broad efficiency gains.
  • Banking achieved record M&A revenues and broad-based market share growth in investment banking, with 15 of the 25 largest transactions advised by Citigroup.
  • Strategic reinvestment in services and markets is prioritized, as management described 2026 as a waypoint for further operating and capital efficiency improvements.
  • Mark Mason indicated, “NII ex markets to be up between 5%-6% in 2026,” attributing growth to volume and mix, primarily in cards, wealth, and deposits.

Industry glossary

  • ROTC/ROTC(E): Return on tangible common equity, a key profitability metric for banks measuring net income returned as a percentage of average tangible common equity.
  • TTS: Treasury and Trade Solutions, Citigroup’s global business segment focused on transaction banking, payments, and liquidity management for institutional clients.
  • Banamex: Citigroup’s former Mexican banking subsidiary, subject to ongoing divestiture activities including partial stake sales and IPO planning.
  • STB: Stress capital buffer, a regulatory capital requirement determined by the results of supervisory stress tests.
  • NCL: Net credit losses, representing actual charge-offs of uncollectible loans minus recoveries in a given period.
  • NIR: Noninterest revenue, comprising fees and other income sources not driven by net interest margin.
  • ACL: Allowance for credit losses, a balance sheet reserve for estimated loan losses reflecting expected future credit deterioration.
  • Efficiency ratio: A measure of noninterest expense as a percentage of total net revenue, indicating cost efficiency.
  • Prime balances: Loan or trading book balances in the prime brokerage segment, generally reflecting assets held for hedge fund clients.
  • Legacy franchises: Citigroup’s businesses or geographic units subject to exit or wind-down, including those related to international divestiture strategy.
  • Operating leverage: The difference between revenue growth and expense growth rates, with positive operating leverage indicating revenue outpaces expenses.

Full Conference Call Transcript

Jane Fraser: Thank you, Jen. And good morning to everyone. This morning, we reported another strong quarter to close out what was a very good year of progress indeed. We got a tremendous amount accomplished in 2025, and I am proud of our team. That said, and we've always been clear about this, we are on a multiyear journey. We remain focused on executing our strategy and transformation. I'm excited to update you on our progress in greater detail and to outline the next phase of our journey at our Investor Day on May 7. In terms of the quarter, excluding the impact of a notable item, our adjusted EPS was $1.81, and our adjusted ROTC was 7.7%.

For the full year, our returns improved to 8.8%, a 180 basis point improvement after adjusting for Banamex and Russia, and adjusted net income surpassed $16 billion. With adjusted revenues up 7%, we delivered positive operating leverage in every one of our five businesses, as well as the firm overall for the second straight year. Each business had record revenues and improved their returns by between 250 and 800 basis points. Services continued to deliver with revenues up 8% and an ROTCE of over 28% for the year. Fee revenue grew by 6% and cross-border transaction value by 10% as we deepened client relationships and supported them across our global network.

Security services assets under custody and administration grew 24% as a result of existing client growth and the onboarding of new client assets. We continue to innovate to provide our clients with always-on, cross-border multi-bank solutions. In 2025, we integrated Citi Token services with $24.07 US dollar tiering, launched in Hong Kong and Dublin, and added euro as a transaction currency. We also expanded our industry-leading Citi Payments Express to 22 markets, and it processed 40% of TTS's payments during the fourth quarter. In October, we began the journey to a unified custody infrastructure and enabling near real-time asset servicing by launching single event processing. All the investments we have made translated to growth and robust market share gains.

Markets delivered record revenues even surpassing our 2020 performance. Combined with better capital efficiency, ROTCE increased to 11.6%. Fixed income was up 10% despite a challenging year for us in commodities. Equities revenues of $5.7 billion were also a record, with an over 50% increase in prime balances as that business continues to gain share. Banking had a record year, including the best quarter and year for M&A revenues in Citi's history, as we gained share in our target sectors as well as in leveraged finance and with sponsors, resulting in an 11.3% ROTCE.

Citi had a role in 15 out of the 25 largest investment banking transactions of the year and advised Boeing, Pfizer, Nippon Steel, Mars, Johnson & Johnson, Blackstone, and TPG. This all drove a 30 basis point year-over-year increase in our investment banking wallet share. Overall, revenues were up 32% whilst keeping expenses flat, showing the discipline we are applying to this business. Wealth delivered another year of strong performance in 2025, including 14% revenue growth, 8% organic NNIA growth, and an ROTCE of over 12%. It's a direct result of the strategy we've executed over the past two years, attracting and retaining industry-leading talent and driving better operating efficiency that's allowed us to invest in key growth areas.

That includes notable partnerships with industry leaders such as BlackRock, that have enhanced our open architecture platform and are elevating the client experience. The integration of the retail bank into wealth makes it easier to deepen share with existing clients and unifies our US deposit franchise. USPB's returns more than doubled for the year, reaching mid-teens driven by continued product innovation, solid customer engagement, and our high-quality card portfolio. Branded cards revenue grew 8% driven by robust engagement from customers in spend, borrowing, and new account acquisitions across our proprietary offerings, and our American Airlines and Costco partnerships. While retail services showed some revenue softness, businesses' returns remained solid.

In terms of capital, we repurchased over $13 billion in common shares during the year, including $4.5 billion in the fourth quarter, as part of our $20 billion plan. Increasing our dividend resulted in a total capital return of over $17.5 billion, the most since the pandemic. We entered the year with a CET1 ratio of 13.2%, which is 160 basis points above our regulatory capital requirement. So we have ample capital to support our growth, and we will continue to return excess capital to our shareholders. We've reached some significant mass in terms of our simplification as we near the end of our international divestitures.

We signed an agreement to sell our consumer business in Poland, and we are receiving final approvals to sell our remaining operations in Russia. And just three months after announcing it, we closed the sale of a 25% stake of Banamex to one of Mexico's most prominent investors. We have made significant progress in terms of our transformation. Over 80% of our programs are now at or nearly at our target state. And while there is more work to do, I'm very pleased with how far we've come, as evidenced by the OCC's termination of article 17 of the consent order in December.

When combined with how we're deploying AI, this bank is being truly transformed in terms of its operational capabilities, its controls, and its tech infrastructure compared to five years ago. But we're also building AI into the processes that move money, manage risk, and serve clients. Colleagues in 84 countries have now interacted with our proprietary tools over 21 million times, and we continue to see adoption increase. It's now above 70%. With much of our transformation behind us, we are shifting our focus to how we can use AI tools and automation to further innovate, reengineer, and simplify our processes beyond risk and controls to improve client experience whilst reducing expenses.

We have started with just over 50 of the largest and most complex processes in the firm, ranging from KYC to loan underwriting. And we're moving with speed to systematically implement modern and efficient solutions. Turning to the macro, the global economy has powered through many shocks over the past few years, creating optimism and confidence that economic growth is poised to continue. With inflation now at normal levels globally, almost every central bank is becoming more accommodating. And while the labor market in the US has softened, capital investment remains strong, especially in tech.

It's the combination of that CapEx, the health of the consumer, and the tax bill benefit from anticipated rate cuts that should be enough to sustain growth. China's relying on exports to grow and compensate for slower domestic consumer demand. Europe has taken some steps to accelerate its anemic growth, and we're hopeful that Germany can create a meaningful stimulus. We have shown that our strategy can deliver results in different environments. As you know, our corporate clients are in great financial shape and are predominantly investment grade in terms of credit quality.

We are very well positioned to continue to help them navigate, whether through our balance sheet or expertise developed from being on the ground in almost 100 countries. So we enter 2026 with visible momentum across the firm. You see it quarter after quarter in the business performance, the improvement in our risk and control environment, the innovation, our ability to attract top talent, and the pace of capital return. As I told our people at a town hall in December, this was the year we changed the conversation around Citi. We are now decidedly on the front foot. But we aren't taking any victory laps.

We are intensely focused on completing our transformation and maintaining our trajectory to deliver the 10 to 11% ROTC we have spoken to you about, as well as another year of positive operating leverage. Those are our top priorities for this year. We are really looking forward to hosting you for Investor Day, where we will lay out how we will take our strategy forward and our path for improving our returns in a sustainable manner. As you'll see, we are just getting started in capturing the upside in front of us. Now before I turn over to Mark, I want to say a few things about him.

As you know, this is Mark's last call as CFO, and he has done a fantastic job for us. As I know you would all agree, he helped guide the bank through the pandemic, provided continuity during my transition to CEO, and has driven a significant part of the remediation work for the consent orders. Through it all, he has been a level source of strength and wisdom. There are few people as responsible for where Citi stands today, especially in terms of its financial performance, as Mark. I wanted to take a moment to thank him for all he has done for our firm. Gonzalo has big shoes to fill indeed.

And with that, I will turn it over to Mark, and then we will both be happy to take your questions.

Mark Mason: Thanks, Jane, and good morning, everyone. I'm going to start with the firm-wide fourth quarter and full-year financial results, focusing on year-over-year comparisons unless I indicate otherwise. Then review the performance of our businesses in greater detail, and close with our current expectations for 2026. On slide seven, we show financial results for the full firm. This quarter, we reported net income of $2.5 billion, EPS of 1.19, and an ROTCE of 5.1% on $19.9 billion of revenues, generating positive operating leverage for the majority of our five businesses.

On an adjusted basis, which excludes the notable item consisting of the impact of the held-for-sale accounting treatment of Citi's remaining operations in Russia, we reported net income of $3.6 billion, EPS of 1.81, and an ROTCE of 7.7%. Total revenues were up 2% driven by growth in banking, services, USPB, and wealth, primarily offset by a decline in all other. Adjusted for the Russia notable item, revenues were up 8%. Net interest income excluding markets, which you can see on the bottom left side of the slide, was also up 8%, driven by services, USB B, legacy franchises, wealth, and banking, partially offset by a decline in corporate other. Noninterest revenues, excluding markets, were down 17%.

However, adjusted for the Russia notable item, noninterest revenues excluding markets were up 23%, driven by better results in banking and all other, partially offset by declines in services, USPB, and wealth. Total markets revenues were down 1%. Expenses of $13.8 billion were up 6%, driven by increases in compensation and benefits, tax charges, legal expenses, as well as technology, partially offset by productivity savings and lower deposit insurance expense. Cost of credit was $2.2 billion, primarily consisting of net credit losses in US cards. For the full year, we generated positive operating leverage for the firm and each of our five businesses, with $14.3 billion of net income up 13%, with an ROTCE of 7.7% on a reported basis.

Adjusted for the Russia notable item this quarter, as well as the goodwill impairment related to Banamex in the third quarter, we delivered $16.1 billion of net income up 27% versus the prior year, with an ROTCE of 8.8%. On slide eight, we show the full-year revenue trend by business from 2021 to 2025. This year, we reported revenue of $85.2 billion. Adjusted for the Russian notable item and excluding divestiture-related impacts, revenues of $86.6 billion were up 7%, our strongest growth in over a decade. With each of our businesses achieving record revenues, 2025 demonstrates another year of our investments in the franchise driving solid top-line growth.

It's worth noting that since 2021, we have generated a compound annual revenue growth rate of 4% on a reported basis, 5% adjusted for the Russia notable item this year, and excluding divestiture-related impacts, and 6% excluding legacy franchises, which has declined by over $2 billion over that period. On slide nine, we show the full-year expense trend from 2021 to 2025. This year, we reported expenses of $55.1 billion. Excluding the Banamex goodwill impairment in the third quarter, expenses were $54.4 billion. The increase in reported expenses was driven by higher compensation and benefits, the Banamex goodwill impairment, technology and communication, and transactional and product servicing expenses, partially offset by lower deposit insurance expenses and restructuring charges.

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, which totaled approximately $800 million for the year, and investments in technology, with productivity and stranded cost reduction partially offsetting continued investments in the businesses. As you can see on the bottom left side of the slide, we have been reducing headcount, and we expect that trend to continue. As we take a step back and look at the trajectory of our expense base, over the past five years, we've invested significantly in the transformation and technology to modernize our infrastructure, simplify and automate our processes, and enhance and streamline our data.

At the same time, we've incurred restructuring and severance charges to simplify our organizational structure and invested in the businesses to drive top-line revenue growth in a disciplined way. We continue to see the benefits of these investments play through this year, with continued productivity savings, as well as revenue growth both contributing to an improvement in our firm-wide efficiency ratio to 63% on an adjusted basis. On slide 10, we show consumer and corporate credit metrics. As I mentioned, the firm's cost of credit was $2.2 billion, primarily consisting of net credit losses in US cards.

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 over $21 billion in total reserves, with a reserve to funded loan ratio of 2.6%. 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 7.7%. It's worth noting that across our US cards portfolios, delinquency and NCL rates continue to perform in line with our expectations.

Looking at the right-hand side of the slide, you can see that our corporate exposure is primarily investment grade, and in the quarter, corporate non-accrual loans as well as corporate net credit losses remained low. 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 in the balance sheet on slide 11, where I will speak to sequential variance. Our $2.7 trillion balance sheet increased 1%, driven by growth in loans, partially offset by a decline in investments. Net end-of-period loans increased 3%, driven by growth in USPB and markets.

Our $1.4 trillion deposit base remains well diversified and increased 1%, driven by growth in services, partially offset by a decline in corporate other. We reported a 115% average LCR and maintained over a trillion dollars of available liquidity resources. We ended the quarter with a preliminary 13.2% standardized CET1 capital ratio, approximately 160 basis points above our 11.6% regulatory capital requirement, which reflects a 3.6% stress capital buffer. As we've said in the past, we remain very focused on the efficient utilization of both standardized and advanced RWA, while providing the businesses with the capital needed to pursue accretive returns.

We will continue to prioritize returning capital to shareholders through buybacks, as evidenced by the $4.5 billion of buybacks in the fourth quarter and over $13 billion for the year, against our $20 billion buyback program. Turning to the businesses on slide 12, we show the results for services in the fourth quarter and full year. Reported revenues were up 158% adjusted for the Russia notable item, driven by growth across both TTS and security services. NII increased 18%, primarily driven by higher average deposit balances and deposit spreads.

NIR increased 10% on a reported basis and declined 11% adjusted for the Russia notable item, as higher lending revenue share outpaced total fee growth of 13%, which you can see on the bottom left side of the slide. We continue to see strong activity and engagement with corporate and commercial clients, and momentum across underlying fee drivers. Cross-border transaction value increased 14%, US dollar clearing volume increased 3%, and assets under custody and administration increased 24%, which includes the impact of market valuation, as we continue to deepen with existing clients and onboard new clients and assets. Expenses increased 9%, primarily driven by higher technology expenses, compensation, benefits, as well as volume-related expenses.

Average loans increased 10%, driven by continued demand for trade loans, in particular export agency finance, and working capital loans. Average deposits increased 11%, with growth across both international and North America, largely driven by an increase in operating deposits. Services delivered net income of $2.2 billion, with an ROTCE of 36.1% in the quarter and 28.6% for the full year. Turning to markets on Slide 13, revenues were down 1% against the best fourth quarter in a decade last year. Fixed income revenues were down 1%, with rates and currencies flat, and spread products and other fixed income down 1%.

Equities revenues were also down 1%, as growth in prime services with balances up more than 50%, which includes the impact of market valuation, as well as derivatives, was more than offset by a decline in cash against a strong prior year quarter. Expenses increased 14%, primarily driven by higher legal expenses, compensation and benefits, technology, and volume-related expenses. Cost of credit was a benefit of $104 million, primarily consisting of a net ACL release resulting from a refinement of loss assumptions for certain portfolios and spread products. Average loans increased 25%, primarily driven by financing activity in spread products.

Markets delivered net income of $783 million, with an ROTCE of 6.2% in the quarter and 11.6% for the full year. Turning to banking on slide 14, revenues were 78% driven by growth in corporate lending and investment banking. Investment banking fees increased 35%, M&A was up 84%, reflecting a record quarter that closed a record year with momentum across several sectors and continued share gain. DCM was up 19%, driven by investment grade and leveraged finance debt, partially offset by lower participation in loans. While ECM was down 16%, driven by lower participation in follow-on, this was partially offset by a continuation of the IPO market recovery supported by favorable market conditions.

Corporate lending revenues, excluding mark-to-market on loan hedges, increased significantly, driven by an increase in lending revenue share. Expenses increased 10%, driven by higher compensation and benefits, which includes recent investments we've made in the business. Cost of credit was $176 million, which included a net ACL build driven by changes in portfolio composition, including credit quality and exposure growth. Banking generated positive operating leverage for the eighth consecutive quarter and delivered net income of $685 million, with an ROTCE of 13.2% in the quarter and 11.3% for the full year. Turning to wealth on Slide 15, revenues were up 7%, 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 12%, driven by higher deposit spreads and average balances, partially offset by lower mortgage spread. NIR decreased 1%. Net new investment asset flows slowed to $7.2 billion in the quarter, consistent with typical seasonality, and we continue to see growth in client investment assets, which were up 14%, including the impact of market valuation, with net new investment assets for the full year representing approximately 8% organic growth. Expenses increased 6%, primarily driven by investments in technology, and volume and other revenue-related expenses. End-of-period client balances continued to grow, up 9%.

Average loans were up 1% as we continue to grow security-based lending and deploy balance sheet to support clients with a focus on shareholder returns. Average deposits were also up 1%, as client transfers from USPB as well as net new deposits were primarily offset by operating outflows and a shift from deposits to higher-yielding investments on Citi's platform. Wealth had a pretax margin of 21%, generated positive operating leverage for the seventh consecutive quarter, and delivered net income of $338 million, with an ROTCE of 10.9% in the quarter and 12.1% for the full year.

Turning to US personal banking on slide 16, revenues were up 3%, driven by growth in branded cards and retail banking, partially offset by a decline in retail services. Branded cards revenues increased 5%, driven by higher loan spread, interest-earning balances, which were up 4%, and gross interchange fees largely offset by higher rewards costs, as customer engagement remained robust with acquisitions up 20% and spend volume up 5%. Retail services revenues were down 7%, primarily driven by lower interest-earning balances and lower loan spread. While growth has been impacted by foot traffic and sales at some of our partners, we continue to see strong returns across the retail services portfolio.

Retail banking revenues increased 21%, driven by the impact of higher deposit spread. Expenses increased 2%, driven by higher transactional and marketing expenses, to support acquisitions and customer engagement, partially offset by a reduction in other expenses. Cost of credit was $1.7 billion, driven by net credit losses in card. For the full year, net credit losses in each of our cards portfolios were at or below the low end of our guided ranges, with branded cards at 3.6% and retail services at 5.73%. Average deposits increased 2%, as net new deposits were primarily offset by the client transfers to wealth that I mentioned earlier.

USBB generated positive operating leverage for the thirteenth consecutive quarter and delivered net income of $845 million, with an ROTCE of 14.3% in the quarter and 13.2% for the full year. Turning to slide 17, we show results for all other on a managed basis, which includes corporate other and legacy franchises, and excludes divestiture-related items. Revenues declined across legacy franchises and corporate other. The decline in legacy franchises was driven by the impact of the Russia notable item, as well as the continued reduction of revenue from our exit and wind-down markets, partially offset by growth in Mexico.

The decline in corporate other was driven by lower NII due to a lower benefit from cash and securities reinvestment, driven by actions taken over the last few quarters to reduce Citi's asset sensitivity in a declining interest rate environment. Expenses were down 6%, with a decline in legacy franchises, partially offset by growth in corporate other. Cost of credit was $449 million, primarily consisting of net credit losses of $341 million, driven by consumer loans in Mexico. Turning to our current expectations for 2026, starting with net interest income excluding markets on slide 19. Following solid growth of nearly 6% in 2025, we expect NII ex markets to be up between 5-6% in 2026.

As you can see on the left-hand side of the page, we expect most of the increase to come from volume growth and mix, primarily driven by higher loan volumes in cards and wealth and deposit volumes in services and wealth. We expect a continued benefit from our investment portfolio, including fixed-rate securities and derivatives, rolling into higher-yielding instruments, partially offset by declining US and non-US short-end rates. Overall, we expect the drivers of NII markets growth in 2026 to be consistent with those in 2025. Turning to slide 20, we show our outlook for operating efficiency and the drivers of our expense base in 2026.

In terms of expenses, we will continue to invest in our businesses to support continued top-line revenue growth and expect higher volume and other revenue-related expenses, with capacity generated from productivity savings from our prior investment, reduction of transformation expenses, continued reduction in stranded cost, as well as a lower level of severance versus 2025. We expect our disciplined expense management combined with top-line revenue momentum will drive another year of positive operating leverage as we target an efficiency ratio of around 60% for the full year. On slide 21, we show a summary of our expectations for 2026.

In addition to our outlook for NII ex markets and efficiency ratio, we expect continued fee momentum across the businesses to drive growth in NIRx markets. In terms of credit, we expect card NCLs to remain within the ranges that we gave for 2025. We will continue to provide the businesses with the capital needed to pursue accretive returns while we optimize our standard and advanced RWA and capital usage. We will, of course, continue to buy back shares against our $20 billion buyback program. Now before we take your questions, I want to say a few words as this is my last earnings call as the CFO of Citi.

I've been with Citi for nearly twenty-five years, and I've been the CFO for the last seven. During my career here, I've seen Citi go through many different evolutions and faced some very challenging times. Yet I've shown up every day for the last twenty-five years wearing my one Citi jersey, surrounded by colleagues who have the same mindset. I've always believed that what sets Citi apart is the heart and determination that it takes to drive real change and deliver for all of our stakeholders: our clients, employees, regulators, and, of course, our shareholders and analysts. As I said in our 2022 investor day, it was a lot to do and there were no quick fixes.

But we had a clear strategy to set the company up to have a higher quality earnings mix and higher sustainable returns. To achieve these financial goals, we were going to do three things. First, invest in our businesses to grow our revenue. Second, become more efficient by investing in the transformation and technology and simplifying our operating model. Third, manage our capital to drive improved return. While there is still a lot more work to be done, as I sit here today, I could not be prouder of the progress that we've made as a firm in terms of executing on our transformation and improving the performance of our firm and each of our five businesses.

Since Jane took over, she has built a truly impressive team, and one that I have been incredibly proud to be part of. I want to thank Jane, my colleagues, and all 226,000 employees for the privilege of serving as your CFO over the last seven years. It has been the most exciting and rewarding time of my career, and it has been an honor to be part of one of Citi's most significant chapters. Looking ahead, I remain fully committed to supporting Jane, Gonzalo, and the broader leadership team as the firm continues its path towards achieving its ROTCE target of 10 to 11% this year and delivering higher returns over time.

So I am leaving the role not at the peak for Citi, but on the upswing, with nothing but upside from here. And with that, Jane and I would be happy to take your questions.

Operator: At this time, we will open the floor for questions. If you would like to ask a question, please press 5 on your telephone keypad. You may remove yourself at any time by pressing 5 again. Please note you will be allowed one question and one follow-up question. Again, that is 5 to ask a question. And we'll pause just a moment. Your first question will come from Glenn Schorr with Evercore. Your line is now open. Please go ahead.

Glenn Schorr: Hi, thank you. And, Mark, you're the best. You deserve a sit on the beach for a little while.

Mark Mason: Thank you, Glenn. Not yet. Not yet. Not yet. But exhale at some point. Thank you.

Glenn Schorr: Okay. I have a question in markets, and I feel like markets is one of the big pieces of the puzzle to get to improved returns. It could be just one quarter, but I see the flattish revenues in the quarter. You talked about a tough year-on-year comp. Let's more focus on the interesting PV balances up around 50%, allocated capital about the same. Trading assets are up like, 23%. Loans are up a bunch. I'm curious on how those things are growing while allocated capital is the same. And yet, the ROTC in the quarter is like 6%.

So this is just a couple of things that make my head scratch a little bit, so I just need a little help there.

Mark Mason: Thanks. Yeah. Look. I'd point to a couple of things. So first of all, you can see the top-line revenue for the full year up 11% for market. So very strong performance. The fourth quarter was very strong last year, so it was a tough year-over-year comp. But we're seeing particular momentum over the course of the year and parts of the franchise, you know, like spread products where we've been doing more around financing and lending activity, and that is a very optimal use of RWA. It's very high returning, low RWA for us. Similarly, that momentum, you know, in equities is supported by prime with equities up 13 for the full year.

And a lot of the action that we see in 2025 is on the heels of having spent a lot of time optimizing RWA in the prior years. Ensuring that we're deploying it where we get the highest return for it. So we come into the year with lower levels of capital. We set that once for the year. We've allocated more GSIB capacity towards the business. Allocated more higher returning use of balance sheet towards lending activity, and those things have contributed to the higher ROTCE that we see here for all of '25. So a combination of optimization of balance sheet and deploying balance sheet in higher returning areas of the franchise.

Glenn Schorr: Okay. Well, all helpful and good perspective. And then this is a small one. But on the expense and efficiency, slide 20, and correct me if I'm wrong, I thought the last look was efficiency ratio below 60%, and now it's we're targeting around 60. It's in the grand scheme of the Citi story, I don't think it's a big deal. I'm just curious if it changed, if it meant to change, or am I reading that wrong?

Mark Mason: No, you're reading it right, Glenn. I think, look, I think a couple of things. Your last point is well taken as well. In the grand scheme of Citi, like, what are we talking about? But let me make the bigger point, which is in '26, as you know, we are focused on ensuring we deliver on the 10% to 11% return. Right? That means top-line momentum, good expense discipline. But in that expense discipline, is both creating capacity through greater productivity, bringing down our transformation cost, etcetera, and investing in the business. Right?

And that investing in the business point is a really important one because Jane has said a number of times now, that 2026 is just a waypoint. In order for us to ensure we're delivering greater returns in '27, '28, etcetera, we have to continue to invest in the franchise. So what you highlighted as a less than 60 moving to an around 60 is giving us the flexibility to ensure that where we see the opportunities to invest beyond '26, that we're taking advantage of those. Does that make sense?

Glenn Schorr: Yeah. Yeah. It makes sense, and I appreciate it. Yeah. Thanks.

Operator: Your next question will come from Mike Mayo with Wells Fargo. Line is now open. Please go ahead.

Mike Mayo: Hi. Jane, if you could elaborate on the new data point that over 80% of your progress with transformation is at the target state or near the target state, what remains and out of what remains, much of that relates to safety and soundness? Thank you.

Jane Fraser: Yeah. Thanks, Mike. Well, while we have some more work to do, let me just say I do feel really good about where we are. As you remember, the audit mainly revolved around four areas: compliance, risk, controls, and data. We're operating at almost as our target state. These are the Citi defined ones for compliance, risk, and controls. In data, we've significantly accelerated progress over the past year, and some of that really been helped by AI as well. We're seeing this translate quickly into both outcomes, and that's including the detailed accuracy of our most critical regulatory reports and in the modernization of our underlying data.

We're focused on completing the work, and we have a finely tuned execution machine that's delivering on time and at the appropriate quality. I am highly confident in our ability to get the remaining work done. I think we all took it as a positive sign that our regulators are also seeing demonstrable improvement in Citi's safety and soundness, and that's publicly evidenced by the OCC's termination of the July 24 amendment. Ultimately, the timing's up to the regulators. Getting the work completed is just the beginning of the end as it were. We need to get comfortable that the work's delivered desired outcomes. It needs to get validated by our independent audit function.

Then the regulators go through their assessment and closure process. That all takes time. But from the shareholder perspective, we're beginning to see the benefits of the investments we've made in our transformation. We're becoming more efficient, as you can see on the back of many of these investments with far better control. As we complete each body of work, we're beginning to bring our expenses down. To Mark's point earlier, that creates the capacity for additional investments. It creates capacity for higher returns in 2026 and beyond. I'd also say it frees up some more management mindshare for growth and innovation.

Mike Mayo: And correct if I'm wrong. I think you were at the end stage for risk and compliance, but now you're saying it controls your mostly there. Well, so that's new. So we're really left with regulatory data, which and, again, correct me. To me, that sounds like regulatory box checking. The sort of thing regulators have talked about. They're deemphasizing. So if you've addressed the substance, and what remains has nothing to do with regulatory box, anything to do with safety and soundness or customers or anything like that. I don't know why the regulators would still have the consent order on after six years. So I guess are you the bottleneck in the process then?

You just have to kinda validate what you've done in internal audit and then turn it over to regulators? If that's the case, how long does it take you to validate your internal?

Jane Fraser: Yeah. I wouldn't go quite as far as you've jumped to. We still do have some work to do. We're very focused around it, and we're making good accelerated progress with it. But, yes. We have to get the work done, validate it, and then hand it over to the regulators in the process we talked about. So, those things have to happen. I'm confident that we'll get there in good shape.

Mike Mayo: And one little attempt, when you hand it over to the regulators, are we talking months, years, what do?

Jane Fraser: That's up to them. They have to answer that one. That very much lies in their hands.

Mike Mayo: Got it. Thank you.

Jane Fraser: Thank you, Mike.

Operator: Your next question will come from Ebrahim Poonawala with Bank of America. Good morning.

Ebrahim Poonawala: Good morning. Maybe two questions. One, Jane, just following up beyond the regulatory piece, what would you say? I think one of the concerns investors have is Citi was behind the curve in terms of franchise investments. You've done a tremendous job over the last five years. Where would you respond to that there is a gap between Citi and best-in-class peers? When we think about investment banking, capital markets, etcetera, how would you size that gap and what is needed, and how long to narrow that gap? Or if in fact eliminate that?

Jane Fraser: So you're right. Over the past five years, not only we've been investing in technology and the transformation, but also in innovations and making sure that we are positioned to drive our growth and our returns and our competitive position. In terms of services, we are the leading firm in a number one position. We've been building out digital asset capabilities, really expand product innovations as you've heard us talk about. Payments express, real-time liquidity, and other always-on digital solutions. We're investing in scaling our security services platform and broadening capabilities there, and you saw the huge growth in the assets under custody and management this year that we've achieved as a result. Service is in a very strong position.

Markets where we've been investing as we continue filling product capability gaps, we're improving capacity, reducing latency, increasing resiliency to support the 11% growth that you saw this year, and in particular areas like prime, which had huge growth of 50%. But we're always looking at where are the new capabilities that can get added on in FX and equities spread products, rates across the board. Now in banking, you saw our prior talent investments driving share gains, so we saw sponsors an area of focus, up 180 bps. Levin up 100, M&A up 90 bps, and we're gonna continue to bring in top talent to fill remaining gaps that we have notably in North America.

Wealth retooling key areas of investment product platform with the open architecture as the key operating principle. So you've seen us retool the research product. We've been investing in deploying new AI-powered capabilities to drive continued momentum in client investment assets and investment fee revenues. Finally, in cards, we're driving engagement and growth with new innovative products, our commerce platform launches, and refreshing various refreshing of different offerings so that we can complement the suite of proprietary cards. We can broaden out our marquee partner relationships. All of this investment is making us feel that we're in a very good place to compete.

Our goals, as we talked about, is to be the, you know, be the leading player, top three or top one in all of the businesses that we're engaged in. It's very important for us that we invest for the long term and not just looking at this on a year-by-year. So that's the mindset we have if that helps you. You can see we're making progress.

Ebrahim Poonawala: No. That's helpful. And maybe, Mark, one for you. Appreciate you moving away from revenue guidance. But maybe help us fill in the blanks a little bit around when we think about fee growth maybe was about 6% ex markets. When we look at 2025. Just how we should think about fee revenue growth embedded in your expectations around that 60% efficiency ratio. Any color on markets NII of at least what the puts and takes should be in terms of delta versus the $10 billion-ish that we saw in 2025? Thanks.

Mark Mason: Yeah. Sure. So first thing is, we did have good fee growth this year. We'd expect that to continue as we think about 2026. Now keep in mind, the 2026 banking wallet was north of $100 billion, and so we expect a constructive wallet. We'll see what that looks like, but we also expect continued share gains against that constructive wallet. We've got a rich pipeline as we go into the beginning of the year. As Jane mentioned, we've been investing in key parts of the franchise that will continue to pay dividends for us in '26 and beyond. So that'll be a positive contributor to fees as we think about 2026.

Similarly, we're expecting continued momentum on the investment revenue side of wealth, as well as on deposit, but in investment revenues, specifically as it relates to your fee point. We saw good growth in client assets up about 14%, good growth in NII up about 8%, and that momentum is expected to continue in '26 as well. So that'll be a contributor to fees. Then, you've seen throughout the year, good KPIs in our services business. In both security services as well as in TTS with US dollar clearing volumes and cross-border transaction value.

But also on the securities side with growth in acts under custody and assets under administration, and we'd expect that momentum to continue particularly with some of the big wins we've seen on the security services side in North America in particular. So the combination of those things, I think, will be positive contributors to NIR, as we think about 2026. I've been pretty consistent in stressing the importance of thinking of the markets business from a total revenue perspective. I would stick to that point. With that said, I think that, you know, one way to think about market is probably relatively flat year over year. Subject to what the wallet is.

Revenues should be somewhat flat year over year but, again, off of strong momentum that we've seen in 2025, and, obviously, mix will matter there. What I will point out is that we have seen meaningful growth in the spread products and financing side of the business, and that obviously does show up in part through NII inside of markets. So hopefully, that gives you some sense, but again, feel good about the NIIX market's outlook by to 6%. That'll be both volume and mix.

On the volume side, I'd expect to see loan growth in cards and wealth probably in the mid-single digits in terms of loans and deposit growth and services and wealth, probably in the mid-single digits in the way of volume there as well.

Ebrahim Poonawala: That's great color. Thank you, Mark, and all the best. And with the next adventure. Bye.

Mark Mason: Thank you. Thank you so much.

Operator: Next question will come from Betsy Graseck with Morgan Stanley.

Betsy Graseck: Hi. Good morning.

Jane Fraser: Good morning.

Betsy Graseck: Hi. Good morning, Betsy. So, Mark, I had a question for you on the NII outlook. Coming into this print, I think you were looking for a slowdown in NII growth from 2025 levels of 5.5%. But you actually increase the NII outlook to 5% to 6%. I know you mentioned also that you took some actions to reduce asset sensitivity. So, we could wrap this all up into what drove that better NII outlook?

Mark Mason: Yeah. Look, it was the NII guidance that we gave last year, we came in a lot better than that in 2025, and that was in part due to the higher loan volumes that we saw, the higher deposit volumes that we saw throughout the year. In fact, that is what is informing the five to six percent ex market NII guidance that I've given for 2026. We'd expect the loan volume to continue. As I mentioned, you are correct what I said earlier. I expect loan volumes to probably be up mid-single digits for total ex markets loans, and, you know, that'll be a again, a combination of growth that we see in cards.

We saw good volume growth in cards, you know, this year, particularly on the branded side. We had good purchase sale activity up 5% in the quarter. All signs of that we should see that continue. Good loan growth on the wealth side, particularly in security-based lending type activity, which is tied to some of the investment momentum. Then really impressive, you know, growth in deposits average deposits for TTS for the year, were up 6% and good operating deposit growth. They are a nice healthy balance between North America as well as internationally.

The momentum that we've seen in cards, in loans, we expect to continue into 2026, and that's a big driver big factor in that NII momentum we're showing on the page. Then as you mentioned, you know, I've been mentioning pretty consistently quarter over quarter. You know, the way we've been managing the investment portfolio that we have is such that we have this case, in '26, about 30% of those securities maturing. They're maturing at lower rates than we're able to redeploy them at including in loans and cash and securities and other instruments. So that's gonna give us a bit of a lift as well.

So it's the combination of those things that give me confidence around the five to 6%.

Betsy Graseck: Okay. Great. And then just on the actions to reduce that, so sensitivity, does that play into this at all? Or what actions did you take?

Mark Mason: We took some You can look at our IRE analysis, and if you look at it pretty it's been pretty consistent in that you know, we've been managing the portfolio in a very dynamic way. If you look at it as of the third quarter, you know, our US dollar, for 100 basis point drop is $300 million right? So we've taken a number of as it relates to the nature of securities that we hold and exiting those in some instances to make sure that we're reducing the asset sensitivity given that we know that rates are likely to go down. Most of that sensitivity you know, is in the non-US dollar.

Part of the portfolio, which as you know represents, you know, more than 65 currencies or so. So it's active management of the balance sheet things you'd expect that we would be doing in order to manage the direction of things that we expect.

Betsy Graseck: Awesome. Okay. Thank you so much, Mark, and congratulations from me as well, and enjoy your 2026 into '27.

Mark Mason: Thank you so much, Betsy.

Operator: Your next question will come from Jim Mitchell with Seaport Global.

Jim Mitchell: Good morning. And, Mark, I think everyone appreciates your efforts over the years. So, you know, good definitely good luck with your new chat. Next chapter.

Mark Mason: Thank you, Jim. Appreciate that.

Jim Mitchell: Yep. Yeah. You're welcome. Just maybe on the capital return side, you're 160 bps above your minimum CET one. I guess, number one, are you still targeting a buffer around 100 bps? And if so, how quickly are you looking to get there? Just trying to get a sense of the pace of buybacks from here over the next few quarters in the year.

Mark Mason: Yeah. No. Thanks for the question. You know, we are, as say, about 160 basis points above. We are still targeting a 100 basis point management buffer and as what that would obviously equate to is us getting, you know, closer to a twelve six. As I think I said in my prepared remarks, we're over the course of the next number of quarters, we'll be our way down towards you know, kind of a twelve six, which would represent that 100 basis points. We're not giving guidance on buybacks quarter to quarter as you know.

But as you look at what we've done you know, in the year at $13 billion or so, I think you can expect that we would look to do more in 2026. In the way of buybacks.

Jim Mitchell: Okay. That's helpful. And just maybe on just the deposit growth and service it has been very strong. It sounds like you're pretty confident in the outlook there. Can you maybe kind of just dive into a little bit more on the drivers why you think that should be sustainable going forward?

Mark Mason: Sure. Look, I think the team has done a really, really good job in TTS, in security services at first. Ensuring that our clients, you know, appreciate that what we bring to bear is more than just deposit taking in the breadth of our offering, particularly around multinational clients. The second thing that I'd say is there has been a focus on you know, as we work with those clients around the world and they look at new markets to enter you know, that we are right there by their side, ensuring that we can help them move and manage their cash and liquidity needs. In an effective way.

That focus and continued dialogue has manifested itself as more in growth and operating deposits you know, for our business, particularly this year. The third thing I'd mention is that, there's still, I think, a significant as it relates to commercial and middle market clients and the team is very focused on, you know, with a I think a very a growing front end on how we capture more share with that client base. So the combination of doing more with our existing multinational, bringing on new clients, and targeting what is, you know, relatively nascent segment for us gives me confidence not just in '26, but in beyond '26 and our ability to have some continued momentum here.

Jim Mitchell: Okay. Got it. Thank you.

Operator: Next question will come from Erika Najarian with UBS.

Erika Najarian: Hi. Thank you for taking my question. I didn't plan to ask this question with this literally just hit the Bloomberg. BILT just unveiled credit cards cap at 10%, and will maintain those rates for a year. And it'll be applicable only to new purchases. Obviously, a tiny player. But I'm just wondering obviously, we all know the many reasons why this shouldn't be capped in perpetuity, including really curtailing credit to those that need it the most. But is this going to be the endgame you think, Jane, in terms of these demands and sort of the push for affordability? I know this is all new, but

Jane Fraser: Yeah. Happy to talk with that, Erica. Look. Let's start with have drawn the presence focused on affordability. Everyone agrees that many for many Americans are oppressing concerns and escalating costs that immediate attention. We're always interested in collaborating with the administration to put in place more effective solutions that are gonna foster the expansion of accessible and affordable credit to those who need it most. Today, we provide our card customers with lower cost products. Think of the no fee simplicity card or our balance of, transfer offers.

I'd also note we were the only big bank to eliminate overdraft fees amongst other measures, and we're very proud of our role as the leading finance of affordable housing in the country for the past fifteen years when you look at the bigger picture. But to your point, a rate cap is not something, that we can reception from the hill, also seemed less than enthusiastic from what we could tell. Just to be clear, the impact to us and other banks would just be dwarfed by the severe impact on access to credit and on consumer spending across the country. These things just don't work out as intended.

Think back when the Carter administration put credit controls in place to reduce costs. The impact was so severe, they were very swiftly rescinded within two months. I think it's helpful to have a few pieces of data, for context, US consumers spend $6 trillion on their credit cards year, and outstanding US credit card balances are over $1.2 trillion. They grow about $80 billion a year. There's over $4 trillion in untapped capacity at risk. If you make these products unprofitable, that spending will be drastically reduced, and that's British understatement.

We've seen this in as other countries have when they've tried this, and also the studies in The US have shown a vast majority of consumers and businesses will lose access to credit cards. They'd be forced to pursue more predatory alternatives, and you'd only be left with the wealth having access to credit cards, and nobody wants that. We'd also see some of the domino effect ricocheting through retail, travel, hospitality sectors, much broader impact on GDP. So as I said, what we want to do is engage on how we can expand credit rather than restrict it to those who need it. That's our goal.

Erika Najarian: Very clear. Thank you, Jane. My real and I'm gonna try to smush it into one, you know, you talked about the progress in the consent order amendment getting lifted. Jane, you talked earlier about as you hit your end state, your target end state expenses come off. As we think about the entirety of the Consent Order listing, is it a gradual, you know, savings or is there sort of a giant chunk that could be reinvested? The sort of follow-up question is just on EB's question on markets NII. Mark, I know that your markets NII is probably less volatile than that of your peers, and I know you want us to think of markets more broadly.

But I'm just wondering as we sort of square your markets sorry, your NII X market guide with consensus, is it prudent to, as a placeholder, put in what you earned in 2025 and to 2026 in terms of markets NII, but perhaps with upward bias.

Jane Fraser: Yep. But you stuck in a few different questions there, Erica. Sorry. Let me just get quickly touch on, what does it mean for our yeah. What does it mean as we get different bodies of work? I think different from some others. We begin to see the benefits of the investment we've made, and we begin and we more efficient on the back of the investment. But as we complete each body of work, we begin to bring the expenses down related to that. That's what creates the additional, investment capacity and will help us drive returns. So it's not as if it's a cliff at the end of the consent order.

You're beginning to see doing this as we get work completed, bringing that expense down and then redeploying that either to the bottom line and as well as to the investments that we need for growth. Maybe just before I turn to Mark just in terms of long-term return trajectory because I think it's we haven't we haven't talked as much about it, and we're looking forward to doing certain best Day. But when we're looking at our longer-term performance, there's really gonna be three drivers of higher returns. The revenue growth, the expense efficiencies, and our RWA and capital efficiency. On the revenue side, you've seen us, and we're very proud of this.

You've really seen us steadily grow revenues over the past few years. 2025 is the continuation of that, and that will continue going forward. Services will grow with new and existing clients, including the opportunity Mark just talked about with commercial clients, as well as further product innovations that opens up whole new revenue streams as we've seen in ecommerce. Market, continued to grow in prime where you've seen very high growth from us. Second leg to our derivative capability, as well as high return opportunities in financing and securitization that's now over 70% of our spread product business. We'll continue filling in some of the areas that we've got with different client base and others to continue driving growth.

I would note that we now have four $5 billion businesses or over 5 billion in markets as opposed to the 4 billion ones we've talked about. Banking you saw the proof of the pudding this quarter, gaining a fuller share of our clients' wallet and just systematically building out the areas we've had gaps and driving, our productivity. Wealth is about scaling up investment penetration with existing and new clients. Also the value that we can see from the integration with US retail. Cards continue growing proprietary products and platform innovations. We have the American Airlines renewal. We're really excited about for next year.

All the different expansion of the offering there and momentum in co-brand offerings, as Mark referred to in his introductory remarks. Then a lot of synergies between the businesses. Mark talked about where the expense efficiencies will come from. In the second leg, the benefits, the investments in our transformation and the technology that we've been doing. As well as the increased productivity the stranded cost removal, etcetera. He's run through where you'll continue to see the expense efficiencies coming through whilst we also make, the long-term investments. I'm very proud of our business leaders. They've been really unrelenting in the optimization of resources in RWA and capital.

We're hoping to see some reductions in our requirements as we saw with the STB results going forward. So there's a lot of potential both for the continued revenue growth, the durable return in improvement in the years ahead, and you'll obviously get a lot more detail Investor Day. But I think it's important to put this in the context of the long term where we're headed rather than just the nitty gritty of the short term. Pieces here.

Mark Mason: Erica, if you're not excited about Investor Day, after that, I don't know what will excite you.

Erika Najarian: We're excited about that. I know. I need to pick out my outfit right now.

Mark Mason: That's right. That's right. I mean, all five of these businesses are humming, we're pretty excited. To your question on market, here's how think about it, Erica. What I said earlier, was that total revenues, you can assume that market's revenues will be flat in '26. I think that's pretty consistent with what consensus has right now.

If you wanted to try and parse it within that flat I think your instincts are probably right that NII, I would forecast to be up within a total revenues of flat if for no other reason, as Jane mentioned and I mentioned earlier, the more work we're doing in financing and securitizations are likely to lead to higher NII's in market as we think about twenty six. I appreciate your starting point in the question, which was that our market's revenues tends to be more steady. I think that is true in a byproduct of our model, our client coverage, and our business mix. But thank you. See you at investor day.

Erika Najarian: Yes. And, good luck, in your for your next adventure. Hopefully, you don't spend too much time at the beach before we see you at another leadership role, at another financial institution?

Mark Mason: You're gonna see you're gonna see as investment day. That's for sure.

Erika Najarian: Fine. Fine. Bye, guys. Thank you. Bye.

Operator: Your next question will come from John McDonald with Truist.

John McDonald: Hi. Yes, thanks. Just follow-up on the last thing, maybe to summarize it. On the efficiency journey. Fair to say that you know, both you have plenty of expense flex to deliver the efficiency improvement to 60 this year? Also that the 60 is a is a waypoint itself. It's not the destination for efficiency ratio. Is are both of those fair?

Mark Mason: Yeah. Look. Look. The way I think about it, yes. We have flex. Is the bottom line. So revenues come in come in softer, we will dial back expenses, you know, accordingly. Importantly, to make sure we get to 10% to 11%. Right? So I don't wanna I don't wanna lose sight of that point. John, I'm not avoiding your question. The answer is yes in terms of flex point. But we're focused on ensuring we deliver the returns of the 10 to 11%. In terms of the long-term operating I'll leave that for Investor Day to talk about. The reason I'm saying that is because we want to invest. We need to invest in this franchise.

The earlier question that was asked in terms of closing the gap versus peers. You know, these are not businesses that you can invest once and be done with. They continue to evolve. They require continued investment and working of them. So I don't wanna, you know, sit here with you today and tell you that operating efficiency goes to some number that's significantly lower without giving you the full context of how we think about the next couple of years. That's what Investor Day is about.

Jane Fraser: I don't know if you wanna add anything. I think you're also hearing confidence from us on our ability to do both. Yes. AI is been an additional benefit. Interesting. I met yeah. We talked I talked a little bit about what we're doing with our over 50 processes on in the prepared remarks. That will be driving new sources of efficiency that three, four years ago, we didn't you know, we couldn't have imagined. We see that ability then to bring the efficiency down and drive our returns up and grow the franchise going forward. You're hearing the confidence from us to be able to do that, and, frankly, they're excited.

John McDonald: Okay. Thank you. That's fair. Then one quick follow-up. Mark, could you give a little more color on the outlook for the card NCLs? The range is the same as last year, but the mid-upper end of the range implies a little bit higher losses than the actual 2025 loss rates, particularly on retail service. Are you just allowing for some macro uncertainty by keeping the ranges, or is there in the delinquency roll rates that you're seeing?

Mark Mason: Yeah. Look, there's to answer your question with the latter part of it, as we look at delinquencies, we're not seeing anything unexpected. In either of the portfolios. Even when we cut it by different FICO scores and income brackets and the like. Are there things out there that could have an impact you know, over the course of the next year? Sure. Does the range give us, you know, some cover around some of those things from an NCL point of view? It does, which is why we're sticking to the range, but there's nothing that I see right now.

John McDonald: Got it. Okay. Great. Thank you.

Operator: Your next question will come from Ken Cassidy with RBC. I'm sorry, Ken Usdin with Autonomous Research.

Ken Usdin: Thanks. Just one for me. Know we're going long here. Mark, the services deposits last year were just really strong, and I'm just wondering if you could tie that into just the broader macro economy and rates and are you continuing to still expect that part of the business can still generate down that level of deposit growth? Thanks.

Mark Mason: Yeah. Sure. So for deposits, total deposits for the firm, next year, we're expecting mid-single digits. As I look at services for 2025, as you said, we were up about 7%. Big part of that TTS was up about six year over year, and security services were up about 12%. I do expect to see continued strength there despite you know, as I think about growth from as I mentioned earlier, more with the large multinationals more with some of our commercial middle market clients, I think a particular emphasis in growth in North America is what I would expect. We've been very thoughtful around pricing.

Obviously, as rates have declined, remember, we've got good loan growth, and so we want these deposits to come in. It's a lower cost of funding for us. We see opportunities to deploy it in that good at good margins and help drive our returns. So this has been about ensuring that we're managing these clients with a client relationship mindset, which includes the deposits, but also all the other things we bring to bear for them.

Ken Usdin: Thank you.

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

Gerard Cassidy: Thank you. Hi, Mark. I'm Jean. Hey, Mark. You're leaving big shoes to fill, so good luck in your future endeavors.

Mark Mason: Thank you so much, Gerard.

Gerard Cassidy: Jane, you guys have done a good job moving the ball down the field in divesting your presence in Mexico. You talked about it today. Can you share with us where we are in terms of I know market conditions will play a factor once you get all the regulatory approvals to do the IPO. Can you share with us where we are on the regulatory part? Then second, will you guys give us the announcement that all the regulatory approvals are in and now it's just market conditions that you've got the green light and you're going to wait until you think it's right?

Jane Fraser: Right. Okay. Well, look. First of all, we had a great outcome for all parties involved with the accelerated closing of the sale of the 25% stake to Fernando Chico Pardo. The Mexican president and her government have been publicly and privately very supportive of both our path forward and of Fernando as the anchor investor. I think we saw that with the record closing of that state. Normally, it would take nine to twelve months to do. So we're very pleased with that. We are focused on the next step in the exit process, and we're actively looking at selling some additional smaller stakes as we lead up to an IPO.

As we said, you know, when you referred to, the actual timing and structure of what we do is all going to be guided by several that includes market conditions with the ultimate goal of maximizing value for shareholders. But that 25% stake that we've just closed is far is a much bigger opening position than we would be if we had IPO ed. So I think the next step is going to be some smaller stakes and we'll keep going from there.

Gerard Cassidy: Very good. Then just a real quick follow-up. Mark, you talked about markets talked about equities, the strong comparison to a year ago. How prime balances were up nicely this quarter. But in the cash equities business, what was the weakness there? I know you identified it, but what was it inside cash equities?

Mark Mason: Again, I think it was it was more of a year-over-year comparison. We had a really strong fourth quarter in equities last year, and that was a big driver.

Jane Fraser: We had a very big we had a couple of very big alpha trade. Yes. So if you strip that out, it looks much more in line with what you would expect.

Gerard Cassidy: Okay. Thank you. If you have a great fourth quarter, it comes back and bites you.

Operator: Your next question will come from Saul Martinez with HSBC.

Saul Martinez: I just have one, and I'll you some love as well, Mark. The best of luck, and we will miss you on these calls.

Mark Mason: Thank you, Saul.

Saul Martinez: The wealth business, net interest NIR was down 1%. I know that there was you know, that reflected the sale of a trust business. But op leverage you know, was minimal. The EBIT margin was pretty much the same as last year. Net new assets, still good, but a little bit softer. I'm just, you know, just curious how you how you're thinking about the progress there. Your level of confidence that you're on track to continue to drive higher op leverage. If you can just remind us what the you know, what the end goal is for op leverage for EBIT margin, I should say, and over what time frame do you expect to get there?

Jane Fraser: Yeah. Let me kick off, and I'll pass it back to Mark. Look. We had a good quarter in Wealth. It was capped off a year of real continued improvement and our revenues are up 14%, the ROTCES is over 12%. We grew client investment assets 14% on the back of percent organic growth. So a lot to like there. What's the strategy in the direction that Andy is taking this? Right? It's to be the lead investment adviser for our clients as been a lot of our focus. So we've been attracting, retaining industry-leading talent, strengthening the CIO research product, with Kate Moore doing a fabulous job there.

A lot of retooling of key components to the investment product and some impressive partnerships. That are really going to differentiate us with industry leaders like BlackRock, I Capital, Palantir. Which means we're we're going to have a we have a really superb open architecture platform and a far better client experience. All of this is helping us drive and accelerate growth in investment fee revenues over the next few years. That's the famous $5 trillion of opportunity, $3 trillion of that is with clients in our US retail and CityGold which is why the integration, the retail bank makes so much sense. But we're clear there's still more work to be done.

There's room to grow and revenues from here. Andy's gonna lay out the path at investor day. So you have the clear sets of KPIs and different elements that are needed, to continue to drive that growth forward. But we remain committed and we see the path to improving the returns of the overall business to above 20% in the long run. Mark, what else would you add?

Mark Mason: The only thing I'd add, and I do think as you pointed out, Jane, we are seeing good momentum and feel very good about the momentum we're seeing on the investment side and, frankly, the opportunity with the wealth of our clients that sit in our retail banking footprint is still a significant sit opportunity for us that is largely not yet tapped. Your question around margins, you know, the medium-term EBIT margin that we set for the business was about 20%. So when you look at 2025, we're there. The longer term is 25% to 30%, and so we still have some headway to make.

As Jane mentioned at Investor Day, we'll be mapping out how we intend to get there.

Saul Martinez: Got it. That's helpful. Thanks so much.

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

Chris McGratty: Chris, we're leaving the best till last.

Chris McGratty: No pressure. Thanks, Jean. Related to Investor Day, I'm interested. When the management team is getting together in the room and discussing the communication of the new targets, does the level of profitability or the timing to which you get there carry more weight? I ask because the market seemingly wants a little higher and sooner, but I'm also sensitive to the bar you set and growing into the targets. Thank you.

Mark Mason: I would say both are important. Yeah. Right? I mean, look. Clearly, 10 to 11 is not sufficient. It shows progress since the last investor day. But we're clear-minded that when we're creating value, we're doing so with returns that are well above our cost of equity. So being able to grow the return level is critically important, and, you know, if you know anything about Jane, you know this. Sense of urgency in kinda making things happen quickly. So, you know, without committing in any way, I would say both are as we think about the forward look. You know, for the firm. But, Jane, why don't I?

Jane Fraser: Yeah. I mean, we want to have a cake eaten, not good on calories. What can I say?

Chris McGratty: Okay. Thank you.

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

Jennifer Landis: Thank you for joining the call. But before we wrap up, I just wanted to briefly echo what Mark shared earlier about Citi. Thank him for his leadership as the CFO of Citi. His focus on transparency, performance, and long-term value creation has set a very high standard for Citi. I personally want to thank Mark for his mentorship and guidance over the years. Thank you. Thank you all for joining, and I'm sure I will talk to you this afternoon.

Operator: This concludes the Citi fourth quarter 2025 earnings call. You may now disconnect.