Citigroup, Inc.

Hello, and welcome to Citi's fourth quarter 2025 earnings call. Today's call will be hosted by Jen Landis, head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remark, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Landis, you may begin. Thank you, Operator.

Good morning, and thank you all for joining our fourth quarter 2025 earnings call. I'm joined today by our Chief Executive Officer, Jane Fraser, and our Chief Financial Officer, Mark Nathan. I'd like to remind you that today's presentation, which is available for download on our website, Citigroup.com, may contain forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors, including those described in our earnings materials as well as in our SEC filings. And with that, I'll turn it over to Jane.

Thank you, Jen, and good morning to everyone. This morning, we reported another strong quarter to close out what was a very good year of progress indeed. We got a tremendous amount accomplished in 2025, and I am proud of our team. That said, and we've always been clear about this, we are on a multi-year journey, and we remain focused on executing our strategy and transformation. And I'm excited to update you on our progress in greater detail and to outline the next phase of our journey at our Investor Day on May 7th. In terms of the quarter, excluding the impact of a notable item, our adjusted EPS was $1.81, and our adjusted ROTC was 7.7%. For the full year, our returns improved to 8.8%, a 180 basis point improvement after adjusting for Banamex and Russia, and adjusted net income surpassed $16 billion. With adjusted revenues up 7%, We delivered positive operating leverage in every one of our five businesses, as well as the firm overall, for the second straight year. Each business had record revenues and improved their returns by between 250 and 800 basis points. Services continued to deliver, with revenues up 8% and an ROTCE of over 28% for the year. Fee revenue grew by 6% and cross-border transaction value by 10% as we deepened client relationships and supported them across our global network. Security services, assets under custody, and administration grew 24% as a result of existing client growth and the onboarding of new client assets. We continue to innovate. to provide our clients with always-on, cross-border, multi-bank solutions. In 2025, we integrated Citi Token Services with 24-7 US dollar clearing, launched in Hong Kong and Dublin, and added Euro as a transaction currency. We also expanded our industry-leading Citi Payments Express to 22 markets, and it processed 40% of TTS's payments during the fourth quarter. In October, we began a journey to a unified custody infrastructure and enabling near real-time asset servicing by launching single event processing. All the investments we have made translated to growth and robust market share gains. Markets delivered record revenues, even surpassing our 2020 performance. Combined with better capital efficiency, ROTCE increased to 11.6%. Fixed income was up 10% despite a challenging year for us in commodities. Equities revenues of $5.7 billion was also a record, with an over 50% increase in prime balances, as that business continues to gain share. Banking had a record year. including the best quarter and year for M&A revenues in Citi's history, as we gained share in our target sectors, as well as in leveraged finance and with sponsors, resulting in an 11.3% ROTCE. Citi had a role in 15 out of the 25 largest investment banking transactions of the year and advised Boeing, Pfizer, Nippon Steel, Mars, Johnson & Johnson, Blackstone and TPG. This all drove a 30 basis point year-over-year increase in our investment banking wallet share. Overall, revenues were up 32% whilst keeping expenses flat, showing the discipline we are applying to this business. Wealth delivered another year of strong performance in 2025, including 14% revenue growth, 8% organic NNIA growth, and an ROTCE of over 12%. It's a direct result of the strategy we've executed over the past two years, attracting and retaining industry-leading talent and driving better operating efficiency that's allowed us to invest in key growth areas. And that includes notable partnerships, with industry leaders such as BlackRock that have enhanced our open architecture platform and are elevating the client experience. The integration of the retail bank into wealth makes it easier to deepen share with existing clients and unifies our U.S. deposit franchise. USPB's returns more than doubled for the year, reaching mid-teens driven by continued product innovation, solid customer engagement, and a high-quality card portfolio. Branded cards revenue grew 8%, driven by robust engagement from customers in spend, borrowing, and new account acquisitions across our proprietary offerings and our American Airlines and Costco partnerships. While retail services showed some revenue softness, the business's returns remained solid. In terms of capital, we repurchased over $13 billion in common shares during the year, including $4.5 billion in the fourth quarter as part of our $20 billion plan. Increasing our dividend resulted in a total capital return of over $17.5 billion, the most since the pandemic. We ended the year with a CT1 ratio of 13.2%. which is 160 basis points above our regulatory capital requirement. So we have ample capital to support our growth and we will continue to return excess capital to our shareholders. We reached some significant milestones in terms of our simplification as we near the end of our international divestitures. We signed an agreement to sell our consumer business in Poland and we are receiving final approvals to sell our remaining operations in Russia. And, just three months after announcing it, we closed the sale of a 25% stake of Banamex to one of Mexico's most prominent investors. We have made significant progress in terms of our transformation. Over 80% of our programs are now at or nearly at our target state. And, while there is more work to do, I'm very pleased with how far we've come, as evidenced by the OCC's removal of Article 17 of the Consent Order in December. When combined with how we're deploying AI, this bank is being truly transformed in terms of its operational capabilities, its controls, and its tech infrastructure compared to five years ago. but we're also building AI into the processes that move money, manage risk, and serve clients. Colleagues in 84 countries have now interacted with our proprietary tools over 21 million times, and we continue to see adoption increase. It's now above 70%. With much of our transformation behind us, we are shifting our focus. to how we can use AI tools and automation to further innovate, re-engineer, and simplify our processes beyond risk and controls to improve client experience whilst reducing expenses. We have started with just over 50 of the largest and most complex processes in the firm, ranging from KYC to loan underwriting. And we're moving with speed to systematically implement modern and efficient solutions. Turning to the macro, the global economy has powered through many shocks over the past few years, creating optimism and confidence that economic growth is poised to continue. With inflation now at normal levels globally, almost every central bank is becoming more accommodating. And while the labour market in the US has softened, capital investment remains strong, especially in tech. And it's the combination of that capex, the health of the consumer, the tax bill benefits and anticipated rate cuts that should be enough to sustain growth. China's relying on exports to grow and compensate for slower domestic consumer demand. And Europe has taken some steps to accelerate its anemic growth. And we're hopeful that that Germany can create a meaningful stimulus. We have shown that our strategy can deliver results in different environments. Our corporate clients are in great financial shape and, as you know, are predominantly investment-grade in terms of credit quality. We are very well positioned to continue to help them navigate an eventful geopolitical environment, whether through our balance sheet or expertise developed from being on the ground in almost 100 countries. So, we enter 2026 with visible momentum across the firm. You see it quarter after quarter in the business performance, the improvement in our risk and control environment, the investments in innovation, our ability to attract top talent, and the pace of capital return. As I told our people at a town hall in December, This was the year we changed the conversation around Citi. We are now decidedly on the front foot. But we aren't taking any victory laps. We are intensely focused on completing our transformation and maintaining our trajectory to deliver the 10 to 11% ROTC we have spoken to you about, as well as another year of positive operating leverage. Those are our top priorities for this year. And we are really looking forward to hosting you for Investor Day, where we will lay out how we will take our strategy forward and our path for improving our returns in a sustainable manner. As you'll see, we are just getting started in capturing the upside in front of us. Now, before I turn over to Mark, I want to say a few things about him. As you know, this is Mark's last call as CFO, and he has done a fantastic job for us, as I know you would all agree. He helped guide the bank through the pandemic, provided continuity during my transition to CEO, and has driven a significant part of the remediation work for the consent orders. Through it all, He has been a level source of strength and wisdom. There are few people as responsible for where Citi stands today, especially in terms of its financial performance as Mark, and I wanted to take a moment to thank him for all he has done for our firm. Gonzalo has big shoes to fill indeed. And with that, I will turn it over to Mark, and then we will both be happy to take your questions.