2Q‘26 Earnings: Strong Qtr Driven by NII; Focus Shifts to 2H‘26 Profitability

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2Q‘26 Earnings: Strong Qtr Driven by NII; Focus Shifts to 2H‘26 Profitability

USA | Large-Cap & Mid-Cap Banks

Citigroup EquityJulyResearch14, 2026

TARGET CHANGE2Q'26 Earnings: Strong Qtr Driven by NII; Focus

RATING BUYShifts to 2H'26 Profitability

PRICE $135.00^

Citi delivered a strong quarter, with core EPS and PPNR ahead of expectations,

driven by stronger-than-expected NII, Markets, and IB results, but the expense PRICE TARGET | % TO PT $165.00 ($180.00) | +22%

outlook was worse than expected as implied by the ROTCE guide for FY26 52W HIGH-LOW $147.96 - $86.22

being reiterated at 10-11% despite 1H'26 ROTCE trending at 13%. Revenue FLOAT (%) | ADV MM (USD) 101.9% | 1,810.36

outperformance could be offset by $5 bn of spending pulled forward that MARKET CAP $226.4B

was originally planned for '27/'28 related to US Card, growth, and productivity TICKER C ^Prior trading day's closing price unless otherwise

initiatives. noted.

Key trends. Core EPS of $3.06 beat our estimate of $2.65 and consensus of $2.74, while core PPNR FY (Dec) CHANGE TO JEFe JEF vs CONS

of $10.6B exceeded both our estimate and consensus of $9.6B. While the quarter itself was clearly 2026 2027 2026 2027

strong, investor focus quickly shifted to Citi's longer-term returns trajectory. Management reiterated EPS* -3% -1% -3% -1%

its 10%-11% FY26 ROTCE target despite generating 13% ROTCE year-to-date, implying a potential

REV* NM <1% NM +1%

meaningful slowdown in profitability during 2H26. At the same time, management emphasized

that incremental upside could be reinvested into growth initiatives, productivity actions, technology

2026 ($) Q1A Q2A Q3 Q4 FY

investments, marketing, and funding optimization efforts rather than flow through to higher near-

REV* 24,633.0 24,766.0 22,963.2 22,639.6 95,001.8