Citigroup, Inc.

Hello and welcome to Citi's second quarter 2026 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 remarks, 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 second quarter 2026 earnings call. I'm joined today by our chair and chief executive officer, Jane Fraser, and our chief financial officer, Gonzalo Lucchetti. 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. Our momentum continued, and the second quarter capped a very good first half of the year. This morning, we reported net income of $5.8 billion for the second quarter, with an EPS of $3.15 and an ROTCE of 13%. This was Citi's best quarterly revenue in a decade, which we delivered with over 9% positive operating leverage. Once again, we saw double-digit revenue growth for the firm and in four of our five businesses. We improved our ROTCE for the firm by 430 basis points and had significant improvement in the returns of every single business. The combination of our investments disciplined execution and focus on clients is delivering improved returns and more durable results. Let me take you through our five businesses. Services delivered its highest ever quarterly revenue and a return of over 30%. Clients continue to lean on our global network more and more. We saw a 13% increase in cross-border transactions and a 19% increase in deposits. Our assets under custody and administration were up over 20% as we onboarded funds and deepened existing relationships. This is the power of our network, and it's a franchise that is very hard to replicate. Markets revenues were up 17% and crossed $7 billion again, as sentiments stayed positive throughout the quarter. Equities was up over 40%, with prime balances up nearly 60%. Underneath fixed 7% growth, FX and spread products continued to shine in yet another example of our global network doing exactly what it is built to do for clients. This offset rates lower performance. Banking revenues climbed 34%, led by a sharp increase in financing activity amidst an overall strong wallet. Investment banking was up 44% as we gained share in equity capital markets. We played a role in the majority of the top equity and debt issuances in the quarter, including lead roles on the high-profile IPOs such as SpaceX and Cerebras. As we enter the second half, the pipeline looks healthy, and we are continuing to invest in talent to fill the gaps in our coverage to gain share, including in M&A. Wealth revenues increased for the ninth straight quarter, up 13%, with growth across all three businesses, while returns improved to over 14%. Client investment assets were up 14%, and net new investment assets have reached $30 billion so far this year. Almost two-thirds of that NNIA growth came from deepening relationships with our existing clients, and referrals from the retail bank to Citigold were up 23%. So you are now starting to see the tangible benefits of integrating our retail branches into wealth. In U.S. consumer cards, investments in our products and partners, which shows up in both revenues and expenses, impacted our operating leverage this quarter. But it's these investments, such as our acquisition of the A.A. Barclays portfolio in April, that will drive future growth in our general purpose portfolio. Furthermore, our resilient customer base kept fueling underlying drivers, loan growth, higher spend, and better credit performance than expected. This resulted in the ROTCE increasing to 22%. During the quarter we completed the sale of our consumer business in Poland. We also closed on the sale of an additional 22.6% equity stake of Banamex and we remain on track to close on an additional 1.4% this summer, which will bring the total amount to 49%. Simplifying Citi through these international consumer divestitures, along with higher PPNR and lower stress losses, contributed directly to our stronger showing in the Fed's stress test last month, and we plan to increase our dividend by 12%. We launched $30 billion common stock repurchase commitment by buying back $4 billion during the quarter. Our CET1 ratio stood at 12.8% and remains about 120 basis points above our current regulatory minimum. We continued to make progress in our transformation with a large body of work passing internal audit validation. As much of the transformation work winds down, we are not only taking down expenses, but we're applying what we learned about large-scale implementation to integrate AI into our businesses and functions wherever it makes sense. Nearly 9 out of 10 of our people are using our AI tools. That's not only driving productivity and client experience, but also growth. Thank you very much. In the US, growth is roughly where it was a year ago and the labor market remains stable. But it's a nuanced story because that growth is not lifting all boats. The extraordinary investment in AI and its supporting cast of semiconductors, data centers and related infrastructure is providing a tailwind in the US and parts of Asia, while a more vulnerable Europe faces yet another competitive headwind. Above all these dynamics, we see real resiliency in our corporate clients who bring strong balance sheets and a proven adeptness at managing the complex environment. You've heard me say many times that Citi's success won't follow a straight line, but the rigor and consistency with which we have executed the strategy we first laid out for you in 2022 and Reinforce at our investor day in May has put Citi back in the game. And our people deserve enormous credit for getting us to this position. We have elevated Citi into a new growth mode. Our returns are improving and the conversation around this firm has changed. Thank you. Thank you. and to be clear, if conditions stay constructive, we intend to take advantage of that. We'll lean in with additional investments and other actions to create value for our shareholders over the medium term. A stronger environment isn't just upside to report. It's an opportunity we will put to work. And finally, as you're all aware, this is Jen Landis' final earnings call before she becomes our Chief Financial Officer for Markets. Jen came to Citi almost five years ago, just after I became CEO. Over that time, she has reestablished trust and credibility with the investor community and rebuilt our investor relations team, which is now recognized as one of the best on the street. You can see her fingerprints on our disclosures, our financial communications, and events such as our recent Investor Day. She has worked tirelessly to make sure you understand where we are going and how we will get there. So, Jen, thank you very much indeed. Before I turn it over to Gonzalo, I would like to thank FIFA for scheduling Argentina's semifinal match in Atlanta for tomorrow and not for today. I shudder to think what choice Gonzalo would have made in that situation. Gonzalo, over to you, and then we will be delighted, as always, to take your questions.