Citigroup Sees ROTCE Beating Guidance as Markets, Cards and Services Gain

Bank of America (BAC) shares fell 5% after CEO Brian Moynihan forecasted a 10%-20% decline in Q3 investment banking fees to $1.6B-$1.8B, down from $2B last year. Sales and trading revenue is expected to be flat. Other banks like Goldman Sachs (GS) and Morgan Stanley (MS) also saw declines. Citigroup (C) reported a stronger outlook with mid-single-digit market revenue growth.

Citigroup CFO Gonzalo Luchetti anticipates the bank's return on tangible common equity to exceed 11% this year. The bank plans to increase stock buybacks beyond the $13 billion completed in 2025 and will accelerate $500 million in investments, including severance packages and marketing for credit cards and wealth management. Luchetti expects to remove Banamex from Citi's balance sheet in 2025, with a $9 billion loss. Citi may acquire small companies but will avoid transformative deals.

Sherritt International Corp, a Canadian miner with Cuban operations, is seeking a US backer to navigate Trump's sanctions. Citigroup and Office Depot hold claims on Sherritt's Cuban properties, valued at over $350 million, complicating potential deals. Sherritt is in talks with Gillon Capital and a consortium including Glencore. Resolving these claims could set a precedent for other Cuban investments.

Citigroup plans to launch a remittance service using tokenized deposits based on blockchain technology for Japanese companies by the end of the year. This marks the first time a foreign financial institution offers such services in Japan, allowing for instant foreign currency remittances. Citigroup handles approximately $6 trillion in funds daily, with tokenized deposit remittances reaching $1 billion per day. The service aims to streamline cross-border payments and reduce delays caused by bank

Citigroup (C) awaits final approval for a wholly owned brokerage license in China, expected by September 2026. The bank plans to double its headcount and expand services to include A-share brokerage, underwriting, and research. This move aligns with Citi's OneCiti strategy to increase its investment-banking wallet share in China. Other global banks like JPMorgan (JPM) and Goldman Sachs (GS) have also strengthened their presence in China's securities market.

Citigroup anticipates regulatory approval for its China brokerage unit this month, according to Reuters. The bank plans to double staff to 100 by year-end, hiring internally and externally. Citi first applied in 2021 but faced delays due to compliance and geopolitical issues. Other banks, like JPMorgan and Goldman Sachs, have seen profits rise from their China units.