Citigroup soars as Fraser plans to buy back $20 billion

On By Littum

(Bloomberg) — Citigroup Inc. said it will buy back $20 billion of its stock in the coming years — freeing up billions in excess capital the bank had kept on hand to meet a key shareholder request.

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The announcement was part of the bank’s stronger-than-expected results for the fourth quarter, with revenue rising across all five main business areas. The lender said it now expects revenue to rise to $83.5 billion to $84.5 billion in 2025, higher than analysts had expected.

The moves sent the shares to their highest level in more than three years as investors looked past signs that Chief Executive Jane Fraser is struggling to contain costs.

“2024 was a critical year and our results show that our strategy is delivering as intended,” Fraser said in a statement. “We entered 2025 with momentum across our businesses.”

Elsewhere in the results, Fraser lowered a key profitability target central to her plans to turn the bank around. The lender now expects the return on tangible common equity to be between 10% and 11% by the end of next year, according to a statement.

It had previously predicted the metric would be between 11% and 12% by then.

Citigroup’s move confirms what analysts have warned: that the lender may find it difficult to keep a lid on spending as it implements a plan to overhaul operations around the world and strengthen internal controls that have frustrated regulators.

The bank said costs in 2025 will be only slightly lower than the $53.8 billion it spent in 2024 as it makes continued investments in its businesses.

The buyback program is a “clear indication of the continued confidence we have around the earnings momentum of our franchise,” Chief Financial Officer Mark Mason said on a conference call with reporters. “We have a way to get our costs down.”

Fraser told investors in early 2022 that she would need five years to complete her turnaround of Citigroup, the only major U.S. bank worth less than half a decade ago. The bank’s return on tangible shared capital was 7 per cent in 2024. That compares with the 22% that rival JPMorgan Chase & Co. reported Wednesday.

“This level is a waypoint, not a destination,” Fraser said in the statement, referring to her revised goal. “We intend to improve returns well above this level and deliver Citi’s full potential to our shareholders.”