Citigroup profit climbs on strength across units, despite loss from Mexico sale

By Tatiana Bautzer and Pritam Biswas

(Reuters) -Citigroup beat estimates for third-quarter profit, which rose as all of its divisions brought in record revenue, despite booking a loss from selling a stake in its Mexico unit.

Shares of the bank rose about 1% before the opening bell on Tuesday.  

Citibank, like its competitors, benefited from a deals rebound as companies struck megadeals, despite uncertainty over U.S. President Donald Trump's tariff policies. 

Net income in the reported quarter climbed 16% to $3.8 billion, compared with a year earlier, while earnings per share jumped 23% to $1.86. In a statement, Citi CEO Jane Fraser said restructuring in recent years has "put Citi in a materially different place in terms of our ability to compete."

The surging profits came despite Citi booking a $726 million loss, which emerged from the sale of a 25% stake in its Mexican subsidiary Banamex. Adjusted earnings per share excluding this loss were $2.24 per share against the $1.90 consensus from analysts, according to LSEG.

BUSINESS STRENGTH 

Revenue in Citi's banking unit gained 34% to $2.1 billion, the biggest growth across its five divisions. Global dealmaking surged in the first nine months of 2025, driven by a strong increase in large transactions that pushed investment banking toward historic peaks. 

Megadeals in global mergers and acquisitions surged to $1.26 trillion in the third quarter, marking a 40% increase from the same period last year.

Citi's markets revenue rose 16.7% to $5.6 billion in the quarter, helped by a strong performance in equities and fixed income. A rate cut in September 2025, and hopes of further easing this year, could help banks by spurring economic activity and demand from borrowers. 

Citi's return on tangible common equity, a measure of how well it uses its capital to earn profit, stood at 8% in the quarter and 8.6% so far this year. Excluding the one-off loss in the quarter, ROTCE was 9.7%, closer to the target set by Fraser of 10% to 11% for next year.

The services division posted its best quarter ever, according to Fraser, with revenue 7% higher than a year earlier. Revenue in the wealth division rose 8%.  

Peers JPMorgan Chase and Wells Fargo also reported higher third-quarter profits on Tuesday, buoyed by investment banking. 

Citi's shares have gained 36.5% in 2025, compared with increases of 28.5% for JPMorgan and 12.4% for Wells Fargo. Citi is recovering lost ground, as the bank has the lowest share price among its peers compared to its book value. The KBW banking index is up nearly 15% year to date. 

MEXICO SALE  

Citi announced last month it would sell a 25% stake in its retail unit Banamex to Mexican billionaire Fernando Chico Pardo, chairman of airport operator ASUR, for around $2.3 billion. 

The bank had planned to hold a public offering for the rest of the unit. However, in a surprise move, Mexican mining and transport conglomerate Grupo Mexico made an unsolicited $9.3 billion offer for Banamex. 

Citi rejected the offer last week. 

The bank bought Banamex in a $12.5 billion deal in 2001. CEO Fraser decided to sell it as she divested overseas businesses, but Citi struggled to find a buyer after talks with Grupo Mexico fell through in 2023. 

(Reporting by Tatiana Bautzer in New York and Pritam Biswas in Bengaluru, editing by Lananh Nguyen, Shinjini Ganguli, Bernadette Baum, Rod Nickel)