Citi has announced a plan to buy back $20 billion worth of its stock in the coming years, releasing some of the extra capital the bank had been holding onto. This decision comes alongside Citi’s strong fourth-quarter earnings, which surpassed expectations. The bank reported growth across all five of its main business areas and now expects revenue to reach between $83.5 billion and $84.5 billion in 2025—higher than analysts had predicted.
The announcement helped Citi stock surge to its highest levels in over three years, as investors remain confident in the bank’s future. Despite challenges with reducing costs, CEO Jane Fraser expressed optimism about the bank’s momentum going into 2025.
“2024 was a key year, and our results show that our strategy is working,” Fraser said. “We’re starting 2025 with strong momentum.”
However, Citi lowered its profitability goal, adjusting its target for return on tangible common equity (ROTE) to between 10% and 11% by the end of 2025, down from its previous estimate of 11% to 12%. This reflects the difficulty of controlling expenses while the bank continues to make significant changes to its global operations and strengthen internal controls.
Citi expects its costs in 2025 to be only slightly lower than the $53.8 billion spent in 2024, as the bank continues to invest in its business transformation.
Mark Mason, Citi’s Chief Financial Officer, emphasized that the buyback program signals confidence in Citi’s earnings. “This shows we are confident in our business’s earnings and our plan to bring costs down,” Mason said.
When Fraser became CEO in 2022, she predicted it would take five years to turn Citi around. In 2024, Citi’s return on tangible common equity was 7%, much lower than JPMorgan Chase & Co.’s 22%. However, Fraser remains optimistic, stating, “This is just a step, not the final goal. We plan to improve returns and reach Citi’s full potential for our shareholders.”