Citigroup Inc. (NYSE:C) reported on Tuesday that the first-quarter fiscal 2025 revenue growth was 3% year-over-year and was $21.6 billion, beating the analyst consensus of $21.29 billion. This growth was driven by each of the five interconnected businesses.

Excluding divestiture-related impacts in both periods, revenues also went up 3%.

The U.S. banking giant reported earnings per share of $1.96, increased from $1.58 a year ago, beating the consensus of $1.84.

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Net income was $4.1 billion, compared to $3.4 billion in the prior-year period, driven by lower expenses and higher revenues, partially offset by higher cost of credit.

Net interest income increased by 4%, driven by U.S. Personal Banking (USPB), Markets, Wealth, and Services. Non-interest revenue increased by 1%, driven by Markets, Banking, and Wealth.

Operating expenses fell 5% to $13.43 billion, and the efficiency ratio of 62% improved by ~490 bps year over year.

Lower operating expenses were driven by a smaller FDIC special assessment, the absence of a restructuring charge, and lower compensation expenses.

Return on average tangible common equity (RoTCE) reached 9.1%, up ~150 bps, and the Common Equity Tier 1 (CET1) Capital ratio was 13.4% for the quarter, ~130 bps above the current regulatory minimum.

The cost of credit, $2.7 billion, increased by 15%, driven by a higher net build in the allowance for credit losses (ACL) related to uncertainty and deterioration in the macroeconomic outlook in the current quarter relative to the prior-year period and higher net credit losses in the card portfolios in USPB.

Services revenues of $4.9 billion were up 3%, driven by Treasury and Trade Solutions growth. Markets revenues of $6.0 billion increased 12%, driven by growth in Fixed Income and Equity markets revenues.

Equity markets revenues of $1.5 billion increased 23%, primarily driven by equity derivatives, on increased market volatility and higher client activity, and momentum in prime services, with prime balances up approximately 16%.

Banking revenues of $2.0 billion increased 12%, driven by growth in Investment Banking and the impact of mark-to-market on loan hedges, partially offset by a decline in Corporate Lending, excluding mark-to-market on loan hedges.

Investment Banking revenues of $1.0 billion increased by 12%, driven by an increase in Investment Banking fees of 14%, driven by growth in Advisory, partially offset by declines in Equity Capital Markets and Debt Capital Markets.

Wealth revenues of $2.1 billion increased 24%, driven by growth across Citigold, the Private Bank, and Wealth at Work.

USPB revenues of $5.2 billion increased by 2%, driven by growth in Branded Cards and Retail Banking, largely offset by a decline in Retail Services.

"When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world's leading economy, and the dollar will remain the reserve currency. The deep knowledge and breadth of capabilities we bring to the many markets where we operate are a point of distinction as we continue to help our clients navigate an uncertain environment," CEO Jane Fraser said.

Outlook: Citigroup expects fiscal 2025 revenue of around $83.1 billion-$84.1 billion, compared to the consensus of $83.59 billion. The banking firm expects expenses just shy of around $53.4 billion.

The company expects 2025 cards NCL rates around the top of the 2024 ranges for both businesses, with higher losses in the first half, consistent with seasonal patterns, subject to changing conditions.

ACL build will be a function of the macroeconomic environment and business volumes.

Price Action: C stock is up 2.57% to $64.85 at the last check on Tuesday.

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