Citigroup Inc. (C): 2Q26 EPS: Robust quarterly result offset by an uncertain 2H26 outlook

Research evidence excerpt

Citigroup Inc. (C): 2Q26 EPS: Robust quarterly result offset by an uncertain 2H26 outlook

Goldman Sachs Citigroup Inc. (C)

2027E P/E target multiple by 0.5x to 12.0x, resulting in our price target falling 4% to

$155 (prev. $162). We are Buy-rated on C.

For further detail, see inside our report.

NII: NII came in at $17.1bn, 9% higher QoQ and 7% above the Street, driven by 4%

higher average earning assets and a 7bps NIM beat. EOP loans rose 4% QoQ (6% above

Street) and EOP deposits rose 3% QoQ (2% above Street). Notably, much of the

quarterly NII strength was driven by markets NII, which grew 42% YoY, while NII

ex-Markets rose 6% YoY, in line with the reiterated full year guidance. On deposit

competition, management highlighted that deposit costs remained stable QoQ at

2.71%, with betas tracking in line with expectations. All in, our NII ex-Markets estimates

remain largely unchanged, as we continue to model a 6%/5%/4% YoY growth in

2026E/27E/28E.

Fee revenue: Core fee income of $7.7bn came in 1% below the Street, with stronger

capital markets revenue more than offset by higher marketing contra-revenue in Card. In

addition, management expect historical markets revenue seasonality to persist, where

2H revenue fell ~20% vs. 1H, and noted potential for further deceleration in 2H26 given

record trading performance YTD. We increase 2027E/28E fee revenue by 2%.

Efficiency: Core efficiency ratio of 57.1% was ~220bps below consensus, primarily

driven by 4% higher core revenue. While C’s 1H26 core efficiency ratio of 57.6% has

significantly outperformed the reiterated ~60% guidance, management indicated that

they look to lean on the near term revenue strength to accelerate investment spend in

2H26 (including potentially incurring further severance), which could pressure expenses.