Citigroup Q3 profit jumps 16% on record revenue, while Mexico sale drags

Citigroup reported a rise in third-quarter profit, as all its divisions brought in record revenue, sending the bank's shares up about 1% in trading before the bell.

Citi and its competitors benefited from a resurgence in activity in the third quarter 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 for Citi, compared with a year earlier, while earnings per share jumped 23% to $1.86.

The surging profits came even after Citi booked a $726 million loss, which emerged from the sale of a 25% stake in its Mexican subsidiary Banamex.

BUSINESS STRENGTH

Revenue in Citi's banking unit gained 31.3% 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 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 stood at 8% in the quarter and 8.6% so far this year, well short of the target set by CEO Jane Fraser of 10% to 11% for next year.

Peers JPMorgan Chase and Wells Fargo also reported higher third-quarter profits earlier 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. The KBW banking index is up nearly 15% year to date.

Revenue in its services, wealth and retail units rose between 6% and 10%.

MEXICO SALE

Citi announced last month that 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 sale triggered a $726 million goodwill impairment that reduced the lender's third-quarter earnings.

The bank had planned to hold a public offering for the rest of the unit, it said at the time. 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.