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Citigroup's Path to 5-6% NII Rise in 2026: What's Driving the Upside?
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Key Takeaways
C expects 5-6% y/y NII growth in 2026, excluding Markets, driven by stronger core earnings.
Citigroup benefits from loan growth in Cards and Wealth, and rising deposits supporting NII expansion.
C gains from its transformation plan, $2-$2.5B savings and lower funding-cost pressure supporting NII.
Citigroup, Inc. (C - Free Report) expects its net interest income (NII), excluding Markets, to grow 5-6% year over year in 2026, supported by improving loan demand, stabilizing deposit costs and disciplined balance-sheet management. The outlook reflects the bank’s efforts to benefit from a more favorable rate and funding environment while continuing to reshape its business toward higher-quality growth.
A key driver is the improvement in loan and deposit trends. At the end of the first quarter of 2026, Citigroup reported $761.6 billion in loans, up 1% sequentially, and $1.45 trillion in deposits, up 3% from the prior quarter. This steady balance-sheet growth provides a stronger base for interest income generation. In the first quarter of 2026, NII rose 12% year over year to $15.7 billion, while NII excluding Markets increased 7% to $12.9 billion, indicating solid momentum heading into the rest of the year.
For 2026, management expects strong loan growth in Cards and Wealth businesses, driven by continued product innovation, solid customer engagement and its high-quality card portfolio, which is further expected to support NII expansion. Citigroup is also likely to benefit from stabilizing funding costs.
After initial monetary easing in 2024 and three rate cuts in 2025, the Federal Reserve has kept rates steady so far in 2026. As such, lower rates are easing pressure on deposit costs while allowing the bank to capture better spreads as loan demand improves.
The company’s broader transformation plan further supports the NII growth target. Citigroup is simplifying operations, exiting non-core consumer businesses and reallocating resources toward core franchises. These moves are expected to generate $2-$2.5 billion in annualized savings by 2026 and help the company deliver positive operating leverage.
Overall, Citigroup’s 5-6% NII growth goal rests on three pillars: balance-sheet growth, lower funding-cost pressure and a leaner operating model focused on core banking opportunities.
What Do C’s Peers Say About Their 2026 NII Expectations?
Bank of America (BAC - Free Report) and JPMorgan (JPM - Free Report) are two peers of Citigroup, which also expects their NII to grow in 2026.
Bank of America indicated that 2026 NII could reach the upper end of 6-8% growth. Bank of America expects growth to be driven by higher yields on fixed-rate assets and steady consumer spending.
JPMorgan expects NII to reach $103 billion in 2026, even as it builds against a lower rate backdrop. Part of the lift is likely to come from Markets NII. JPMorgan expects 2026 NII, excluding Markets, of $95 billion, implying Markets NII of $8 billion, an area that can be more variable than the core lending-and-deposit engine.
C’s Price Performance & Zacks Rank
Shares of Citigroup have gained 69.5% over the past year compared with the industry’s growth of 27%.
View the Zacks #1 Rank List
Image: Bigstock
Citigroup's Path to 5-6% NII Rise in 2026: What's Driving the Upside?
Key Takeaways
Citigroup, Inc. (C - Free Report) expects its net interest income (NII), excluding Markets, to grow 5-6% year over year in 2026, supported by improving loan demand, stabilizing deposit costs and disciplined balance-sheet management. The outlook reflects the bank’s efforts to benefit from a more favorable rate and funding environment while continuing to reshape its business toward higher-quality growth.
A key driver is the improvement in loan and deposit trends. At the end of the first quarter of 2026, Citigroup reported $761.6 billion in loans, up 1% sequentially, and $1.45 trillion in deposits, up 3% from the prior quarter. This steady balance-sheet growth provides a stronger base for interest income generation. In the first quarter of 2026, NII rose 12% year over year to $15.7 billion, while NII excluding Markets increased 7% to $12.9 billion, indicating solid momentum heading into the rest of the year.
For 2026, management expects strong loan growth in Cards and Wealth businesses, driven by continued product innovation, solid customer engagement and its high-quality card portfolio, which is further expected to support NII expansion. Citigroup is also likely to benefit from stabilizing funding costs.
After initial monetary easing in 2024 and three rate cuts in 2025, the Federal Reserve has kept rates steady so far in 2026. As such, lower rates are easing pressure on deposit costs while allowing the bank to capture better spreads as loan demand improves.
The company’s broader transformation plan further supports the NII growth target. Citigroup is simplifying operations, exiting non-core consumer businesses and reallocating resources toward core franchises. These moves are expected to generate $2-$2.5 billion in annualized savings by 2026 and help the company deliver positive operating leverage.
Overall, Citigroup’s 5-6% NII growth goal rests on three pillars: balance-sheet growth, lower funding-cost pressure and a leaner operating model focused on core banking opportunities.
What Do C’s Peers Say About Their 2026 NII Expectations?
Bank of America (BAC - Free Report) and JPMorgan (JPM - Free Report) are two peers of Citigroup, which also expects their NII to grow in 2026.
Bank of America indicated that 2026 NII could reach the upper end of 6-8% growth. Bank of America expects growth to be driven by higher yields on fixed-rate assets and steady consumer spending.
JPMorgan expects NII to reach $103 billion in 2026, even as it builds against a lower rate backdrop. Part of the lift is likely to come from Markets NII. JPMorgan expects 2026 NII, excluding Markets, of $95 billion, implying Markets NII of $8 billion, an area that can be more variable than the core lending-and-deposit engine.
C’s Price Performance & Zacks Rank
Shares of Citigroup have gained 69.5% over the past year compared with the industry’s growth of 27%.
Image Source: Zacks Investment Research
Currently, C carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.