Citigroup (C) Stock: Q4 Profit Drops Amid $1.2B Russia Sale Hit Despite Strong Interest Income

TLDR

• Russia exit loss hit Q4 profit, but underlying revenue growth stayed resilient
• Citi shares slipped 1.19% as a late sell-off erased an early earnings bounce
• Adjusted EPS beat expectations, showing strength beyond the Russia charge
• Loan and deposit growth stayed firm as credit costs and provisions improved
• Full-year profit rose, highlighting stable demand despite higher expenses

Citigroup posted a weaker fourth quarter as a major Russia-related loss overshadowed steady revenue growth across core businesses. The bank closed at $116.30, down 1.19%, after late selling erased an early advance. However, the firm still reported full-year gains that highlighted stable loan demand and stronger interest income.

Q4 Earnings Weaken as Russia Charge Cuts Profit

Citigroup reported quarterly net income of $2.5 billion, as a $1.2 billion loss tied to its planned Russia exit reduced earnings. The charge flowed through other revenues and affected the effective tax rate, which rose to 34%. Moreover, earnings per share dropped to $1.19, but excluding the item, adjusted EPS reached $1.81.

Revenue increased 2% to $19.9 billion, supported by Banking, Services, U.S. Personal Banking, and Wealth. The Russia-related loss masked underlying strength because revenue excluding the item rose 8%. Additionally, net interest income increased 14%, driven by higher lending activity and stronger performance in Markets and USPB.

Operating expenses rose 6% to $13.8 billion, reflecting higher compensation, legal costs, and technology spending. The company continued to implement productivity programs, yet rising non-income tax charges added pressure. Even so, credit costs improved because the provision for credit losses fell to $2.2 billion.

Credit Trends, Loan Growth, and Balance Sheet Shifts

Citigroup recorded $2.2 billion in net credit losses, slightly lower than last year due to improvements in USPB. The allowance for credit losses ended the quarter at $21.4 billion, down from a year earlier due to the Russia reclassification. Non-accrual loans rose 35% to $3.6 billion, driven by corporate downgrades and higher consumer volumes.

Total loans increased 8% to $752 billion, with gains in Markets, Services and USPB. Average loans climbed 7%, reflecting steady demand through the quarter. Deposits grew 9% to about $1.4 trillion, with Services delivering the strongest contribution.

The bank ended the period with a CET1 ratio of 13.2%, slightly below the prior quarter due to buybacks and dividend payments. The supplementary leverage ratio held at 5.5%, reflecting stable capital deployment. Furthermore, the company returned $5.6 billion to shareholders through repurchases and dividends.

Full-Year Performance Shows Broad Improvement

Citigroup reported $14.3 billion in net income for 2025, up from $12.7 billion in the prior year. Revenue reached $85.2 billion, supported by higher interest income and steady client demand across major segments. Excluding notable items, net income rose to $16.1 billion, showing a stronger underlying trend.

Book value per share increased 8% to $110.01, while tangible book value per share rose 9% to $97.06. These gains stemmed from net income and favorable movements in accumulated other comprehensive income. Share repurchases boosted book value but reduced tangible book value due to pricing differences.

Citigroup entered 2026 with a stronger balance sheet despite the Russia-related hit. Revenue growth in key businesses and improved credit trends offset rising expenses. Yet the Russia sale impact shaped quarterly results and held back an otherwise solid performance built on resilient lending and deposit flows.

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