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In the first six months of 2026, Citigroup witnessed increases in net interest income (NII) and non-interest revenues. Building on this momentum, the globally diversified financial services holding company is expected to report year-over-year growth in both earnings and revenues for the third quarter.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $23.66 billion, indicating a 7.1% year-over-year increase.
The consensus estimate for earnings for the to-be-reported quarter has been revised downward to $2.66 over the past seven days. The figure indicates 18.8% growth from the prior-year quarter.
Estimate Revision Trend
Image Source: Zacks Investment Research
The company also has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.68%.
Earnings Surprise History
Image Source: Zacks Investment Research
Major Factors to Impact Citigroup’s Q3 Results
NII: In mid-September 2026, the Federal Reserve raised its interest rates by 25 basis points to 3.75%-4%, citing persistently elevated inflation. This is less likely to have much impact on the company’s NII and margin.
Meanwhile, lending activity remained impressive in the first two months of the third quarter, building on the momentum witnessed in the first half of 2026. Per the Fed’s latest data, commercial and industrial loan growth was healthy during the period, while consumer and real estate lending remained steady. Thus, continued loan growth is expected to have supported Citigroup’s NII by expanding the interest-earning asset base while funding and deposit costs stabilized.
The Zacks Consensus Estimate for NII is pinned at $16.6 billion, suggesting an 11.1% year-over-year rise.
Fee Income: Following a record-setting first half, global merger and acquisition (M&A) activity slowed during the third quarter as geopolitical tensions and macroeconomic uncertainties weighed on deal-making. Rising borrowing costs, persistent inflation and valuation gaps also remained headwinds. Despite these challenges, strategic acquirers continued to pursue transactions focused on expanding scale, enhancing operational resilience and strengthening competitive positioning.
The third quarter saw healthy initial public offering (IPO) and equity issuance activity, despite some moderation from strong second-quarter levels. Debt issuance also remained solid, supported by corporate refinancing and continued investor demand. These trends are expected to have supported C’s underwriting revenues, which accounted for nearly 69% of Investment Banking (IB) revenues in the first six months of 2026. Management guided for third-quarter 2026 IB revenues to increase in the low single digits year over year, with some upside depending on deals that closed toward the end of the quarter.
The company also expects third-quarter 2026 trading activity to be healthy, with continued momentum across key trading businesses, particularly in equities, derivatives, financing and foreign exchange. Strength across these businesses is expected to have further supported Citigroup's markets revenues during the quarter. Management expects third-quarter 2026 markets revenues to grow in the mid-single digits from the prior-year period. The Zacks Consensus Estimate for markets revenues is $6.1 billion, implying a 9.1% year-over-year rise.
The Zacks Consensus Estimate for income from commissions and fees is pinned at $2.9 billion, which indicates a 2.1% year-over-year rise. The consensus estimate for income from principal transactions is pegged at $3.1 billion, suggesting a 10.1% increase year over year. Also, the Zacks Consensus Estimate for administration and other fiduciary fees is $1.2 billion, implying a rise of 5% year over year.
The Zacks Consensus Estimate for total non-interest income for the third quarter of 2026 is pegged at $7.2 billion, suggesting a marginal year-over-year increase.
Expenses: Though Citigroup is focused on lowering expenses through organizational simplification, cost reductions and productivity savings, continued investments in business transformation efforts, technology and controls, along with higher business-related expenses, are likely to have kept the expense base elevated in the third quarter of 2026. In addition, management expects U.S. Consumer Cards expense growth to outpace revenues, limiting near-term margin expansion.
Asset Quality: After setting aside a decent amount for potential loan losses in the first half of 2026, Citigroup is likely to have increased reserve building in the to-be-reported quarter, as the recent Fed rate hike and expectations of another hike later this year could weigh on borrowers’ repayment capacity.
The Zacks Consensus Estimate for non-accrual loans is pegged at $3.72 billion, indicating a rise of 1.1% from the prior-year quarter.
What Our Model Unveils for C
Our proven model conclusively predicts an earnings beat for Citigroup this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you can see below.
Citigroup has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
In the third quarter of 2026, C shares plunged 7.5% compared with the industry’s 2.9% decline. Among its peers, shares of Bank of America (BAC - Free Report) and Wells Fargo (WFC - Free Report) lost 4.5% and 3.2%, respectively, during the same period.
Third-Quarter Price Performance
Image Source: Zacks Investment Research
Wells Fargo is scheduled to report its quarterly results on Oct. 13, the same day as Citigroup, while Bank of America is set to announce its results on Oct. 14.
Now, let us look at the value that Citigroup offers investors at the current levels. C is trading at 10.14X forward 12-month earnings, below the industry’s forward price/earnings (P/E) multiple of 12.76X. The company’s valuation looks inexpensive compared with the industry average.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Citigroup’s stock is also trading at a discount compared with Bank of America’s P/E of 10.46X and Wells Fargo's P/E of 10.26X.
Investment Thesis for Citigroup
Citigroup is making steady progress in streamlining its operations, with its multi-year exit from non-core international consumer banking nearing completion. The sale of its Polish consumer business in June 2026 marked the final international consumer divestiture, apart from the wind-down of its Korean operations and the ongoing Banamex divestiture. The company currently holds a 51% stake in Banamex and expects to complete its deconsolidation in early 2027, potentially followed by an IPO, which could release approximately $5 billion in capital. These efforts are expected to reduce operational complexity, free up capital and enable Citigroup to allocate more resources to its core businesses. As the remaining exits and wind-downs conclude, lower stranded costs and more focused capital allocation are likely to strengthen its ability to generate sustainable returns.
Alongside its business simplification efforts, C remains focused on expense discipline and operational efficiency. It is reducing management layers, expanding spans of control and optimizing its workforce, with headcount declining to 219,000 as of June 30, 2026, from 230,000 a year earlier. These measures resulted in more than $800 million in severance costs during the first half of 2026. Meanwhile, investments in technology and artificial intelligence (AI), combined with process simplification, platform consolidation and increased automation, are expected to enhance long-term productivity.
Collectively, these initiatives are anticipated to generate $2-$2.5 billion in annualized savings by the end of 2026, supporting management's full-year efficiency ratio target. Improving operational efficiency, along with stronger business performance, is expected to support profitability, with management projecting full-year 2026 return on tangible common equity to exceed 11%, above its previous 10-11% target.
Beyond its efficiency initiatives, the company continues to strengthen its core businesses and deepen customer relationships. In August 2026, it agreed to acquire Kard Financial to enhance personalized rewards and merchant-funded offers. The September launch of Citi Commerce Media reinforces this strategy, helping C increase cardholder engagement and expand its commerce ecosystem.
Citigroup's liquidity position also provides room for continued shareholder distributions. Following its successful completion of the 2026 Fed stress test, the company raised its quarterly dividend by 12% to 67 cents per share and continues its $30-billion multiyear share repurchase program.
Parting Thoughts on Citigroup Ahead of Q3 Earnings
Citigroup’s progress on business simplification and cost control, along with business expansion efforts, capital returns and an inexpensive valuation, is a positive catalyst. However, elevated restructuring and technology expenses could continue to pressure near-term results.
Therefore, investors may prefer to wait for C’s upcoming third-quarter results before initiating new positions, as the earnings release could provide clearer visibility into cost savings, business growth and profitability. Management’s commentary on credit trends, capital deployment and progress on the remaining divestitures will be particularly important. Still, existing shareholders may consider holding their positions, as continued progress on the transformation could support Citigroup’s long-term earnings and return potential.
View the Zacks #1 Rank List
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Here's How to Play Citigroup Stock Ahead of Q3 Earnings Release
Key Takeaways
Citigroup Inc. (C - Free Report) is slated to report third-quarter 2026 results on Oct. 13, before market open.
In the first six months of 2026, Citigroup witnessed increases in net interest income (NII) and non-interest revenues. Building on this momentum, the globally diversified financial services holding company is expected to report year-over-year growth in both earnings and revenues for the third quarter.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $23.66 billion, indicating a 7.1% year-over-year increase.
The consensus estimate for earnings for the to-be-reported quarter has been revised downward to $2.66 over the past seven days. The figure indicates 18.8% growth from the prior-year quarter.
Estimate Revision Trend
Image Source: Zacks Investment Research
The company also has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.68%.
Earnings Surprise History
Image Source: Zacks Investment Research
Major Factors to Impact Citigroup’s Q3 Results
NII: In mid-September 2026, the Federal Reserve raised its interest rates by 25 basis points to 3.75%-4%, citing persistently elevated inflation. This is less likely to have much impact on the company’s NII and margin.
Meanwhile, lending activity remained impressive in the first two months of the third quarter, building on the momentum witnessed in the first half of 2026. Per the Fed’s latest data, commercial and industrial loan growth was healthy during the period, while consumer and real estate lending remained steady. Thus, continued loan growth is expected to have supported Citigroup’s NII by expanding the interest-earning asset base while funding and deposit costs stabilized.
The Zacks Consensus Estimate for NII is pinned at $16.6 billion, suggesting an 11.1% year-over-year rise.
Fee Income: Following a record-setting first half, global merger and acquisition (M&A) activity slowed during the third quarter as geopolitical tensions and macroeconomic uncertainties weighed on deal-making. Rising borrowing costs, persistent inflation and valuation gaps also remained headwinds. Despite these challenges, strategic acquirers continued to pursue transactions focused on expanding scale, enhancing operational resilience and strengthening competitive positioning.
The third quarter saw healthy initial public offering (IPO) and equity issuance activity, despite some moderation from strong second-quarter levels. Debt issuance also remained solid, supported by corporate refinancing and continued investor demand. These trends are expected to have supported C’s underwriting revenues, which accounted for nearly 69% of Investment Banking (IB) revenues in the first six months of 2026. Management guided for third-quarter 2026 IB revenues to increase in the low single digits year over year, with some upside depending on deals that closed toward the end of the quarter.
The company also expects third-quarter 2026 trading activity to be healthy, with continued momentum across key trading businesses, particularly in equities, derivatives, financing and foreign exchange. Strength across these businesses is expected to have further supported Citigroup's markets revenues during the quarter. Management expects third-quarter 2026 markets revenues to grow in the mid-single digits from the prior-year period. The Zacks Consensus Estimate for markets revenues is $6.1 billion, implying a 9.1% year-over-year rise.
The Zacks Consensus Estimate for income from commissions and fees is pinned at $2.9 billion, which indicates a 2.1% year-over-year rise. The consensus estimate for income from principal transactions is pegged at $3.1 billion, suggesting a 10.1% increase year over year. Also, the Zacks Consensus Estimate for administration and other fiduciary fees is $1.2 billion, implying a rise of 5% year over year.
The Zacks Consensus Estimate for total non-interest income for the third quarter of 2026 is pegged at $7.2 billion, suggesting a marginal year-over-year increase.
Expenses: Though Citigroup is focused on lowering expenses through organizational simplification, cost reductions and productivity savings, continued investments in business transformation efforts, technology and controls, along with higher business-related expenses, are likely to have kept the expense base elevated in the third quarter of 2026. In addition, management expects U.S. Consumer Cards expense growth to outpace revenues, limiting near-term margin expansion.
Asset Quality: After setting aside a decent amount for potential loan losses in the first half of 2026, Citigroup is likely to have increased reserve building in the to-be-reported quarter, as the recent Fed rate hike and expectations of another hike later this year could weigh on borrowers’ repayment capacity.
The Zacks Consensus Estimate for non-accrual loans is pegged at $3.72 billion, indicating a rise of 1.1% from the prior-year quarter.
What Our Model Unveils for C
Our proven model conclusively predicts an earnings beat for Citigroup this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you can see below.
Citigroup has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Citigroup’s Price Performance & Valuation
In the third quarter of 2026, C shares plunged 7.5% compared with the industry’s 2.9% decline. Among its peers, shares of Bank of America (BAC - Free Report) and Wells Fargo (WFC - Free Report) lost 4.5% and 3.2%, respectively, during the same period.
Third-Quarter Price Performance
Image Source: Zacks Investment Research
Wells Fargo is scheduled to report its quarterly results on Oct. 13, the same day as Citigroup, while Bank of America is set to announce its results on Oct. 14.
Now, let us look at the value that Citigroup offers investors at the current levels. C is trading at 10.14X forward 12-month earnings, below the industry’s forward price/earnings (P/E) multiple of 12.76X. The company’s valuation looks inexpensive compared with the industry average.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Citigroup’s stock is also trading at a discount compared with Bank of America’s P/E of 10.46X and Wells Fargo's P/E of 10.26X.
Investment Thesis for Citigroup
Citigroup is making steady progress in streamlining its operations, with its multi-year exit from non-core international consumer banking nearing completion. The sale of its Polish consumer business in June 2026 marked the final international consumer divestiture, apart from the wind-down of its Korean operations and the ongoing Banamex divestiture. The company currently holds a 51% stake in Banamex and expects to complete its deconsolidation in early 2027, potentially followed by an IPO, which could release approximately $5 billion in capital. These efforts are expected to reduce operational complexity, free up capital and enable Citigroup to allocate more resources to its core businesses. As the remaining exits and wind-downs conclude, lower stranded costs and more focused capital allocation are likely to strengthen its ability to generate sustainable returns.
Alongside its business simplification efforts, C remains focused on expense discipline and operational efficiency. It is reducing management layers, expanding spans of control and optimizing its workforce, with headcount declining to 219,000 as of June 30, 2026, from 230,000 a year earlier. These measures resulted in more than $800 million in severance costs during the first half of 2026. Meanwhile, investments in technology and artificial intelligence (AI), combined with process simplification, platform consolidation and increased automation, are expected to enhance long-term productivity.
Collectively, these initiatives are anticipated to generate $2-$2.5 billion in annualized savings by the end of 2026, supporting management's full-year efficiency ratio target. Improving operational efficiency, along with stronger business performance, is expected to support profitability, with management projecting full-year 2026 return on tangible common equity to exceed 11%, above its previous 10-11% target.
Beyond its efficiency initiatives, the company continues to strengthen its core businesses and deepen customer relationships. In August 2026, it agreed to acquire Kard Financial to enhance personalized rewards and merchant-funded offers. The September launch of Citi Commerce Media reinforces this strategy, helping C increase cardholder engagement and expand its commerce ecosystem.
Citigroup's liquidity position also provides room for continued shareholder distributions. Following its successful completion of the 2026 Fed stress test, the company raised its quarterly dividend by 12% to 67 cents per share and continues its $30-billion multiyear share repurchase program.
Parting Thoughts on Citigroup Ahead of Q3 Earnings
Citigroup’s progress on business simplification and cost control, along with business expansion efforts, capital returns and an inexpensive valuation, is a positive catalyst. However, elevated restructuring and technology expenses could continue to pressure near-term results.
Therefore, investors may prefer to wait for C’s upcoming third-quarter results before initiating new positions, as the earnings release could provide clearer visibility into cost savings, business growth and profitability. Management’s commentary on credit trends, capital deployment and progress on the remaining divestitures will be particularly important. Still, existing shareholders may consider holding their positions, as continued progress on the transformation could support Citigroup’s long-term earnings and return potential.