Citigroup surprised the financial market with a robust performance in the second quarter of 2025, driven by a combination of record revenues from asset trading and a favorable environment for mergers and acquisitions. The institution demonstrated great adaptability, attracting attention by announcing an aggressive share buyback plan, the largest in over a decade.
Citi reaches historic high with solid profits and billion-dollar buyback
Citigroup’s C.Nshares briefly touched their highest since the 2008 financial crisis after the bank beat Wall Street estimates for second-quarter profit and said it plans to buy back at least $4 billion in stock. The stock rose as high as $90.69 on Tuesday after the third largest U.S. lender reported market-beating earnings, driven by windfalls in its trading and investment banking businesses. It was last up 3% in late afternoon trading.
The promised $4 billion share buyback in the third quarter is bigger than the $3.75 billion the bank bought back in the first half of the year. Analysts reacted well to the results and increased shareholder return. Kenneth Leon, director of Research at CFRA, increased the target price for Citigroup by $17 to $110 per share for the next 12 months. Leon said the bank deserves to trade closer to peers as its performance is improving.
Stocks and bonds have whipsawed since April, when U.S. President Donald Trump stunned markets by announcing sweeping tariffs against major trading partners. Volatility tends to help Wall Street trading desks as clients adjust their portfolios. Citi’s markets revenue jumped 16% to $5.9 billion, its best performance since the second quarter of 2020. Markets have rebounded and investment banking deals resumed after the initial shock of U.S. tariff announcements in April froze activity.
Active participation in the year’s largest transactions boosts prospects
“We’re very pleased on the M&A front – the pipeline is excellent,” CEO Jane Fraser told analysts on a conference call, and said the bank is working on seven of the 10 largest investment banking transactions of the year. The bank has been seeing more activity in healthcare and tech, mainly in North America, and more deals coming from financial sponsors.
Investor optimism was also fueled by Citi’s significant performance in large-scale deals, solidifying its presence among the sector’s leading players. The fact that it was directly involved in seven of the year’s ten largest M&A transactions shows that the bank not only benefited from the resumption of negotiations but also expanded its influence in the most strategic market segments.
The third-largest U.S. lender’s net income was $4 billion, or $1.96 per share, in the three months ended June 30. Analysts, on average, had expected $1.60 per share, according to estimates compiled by LSEG. In addition to the higher revenue from trading, Citi’s investment banking fees rose 13%.
Growing activity in capital markets reinforces results
Chief Financial Officer Mark Mason said the bank still sees dealmaking picking up despite tariff uncertainty ahead of an August 1 implementation date. “The equity and debt issuance markets remain constructive in light of equity evaluations and the direction of interest rates.”, he said. Equity capital markets fees climbed 25% in the quarter, driven by strength in convertibles and initial public offerings.
The recovery in capital markets, particularly in IPOs and debt issuances, served as an additional catalyst for the bank’s earnings in the quarter. Rising asset values and renewed appetite for risk boosted demand for specialized services, an area where Citi capitalized quickly.
Strategic focus and investor returns support optimistic projections
After a surprising result in this last quarter, a strong presence in strategic businesses and an ambitious shareholder return plan, the current scenario places Citigroup with a good outlook for the coming months even amid the political and economic challenges currently present in the market.
GCN.com/Reuters