Citigroup Soars as Fraser Plans to Buy Back $20 Billion of Stock

 Citigroup Inc. said it will repurchase $20 billion worth of its stock in the coming years — unleashing billions of excess capital the bank had been keeping on hand in order to meet a key ask from shareholders.

The announcement was part of the bank’s stronger-than-expected results for the fourth quarter, in which revenue rose across all five of its main business lines. The lender said it now expects revenue to rise to $83.5 billion to $84.5 billion in 2025, higher than what analysts were anticipating.

The moves sent shares soaring to their highest level in more than three years as investors looked past signs that Chief Executive Officer Jane Fraser is struggling to contain costs.

“2024 was a critical year and our results show our strategy is delivering as intended,” Fraser said in a statement. “We entered 2025 with momentum across our businesses.”

Elsewhere in the results, Fraser lowered a crucial profitability target that is central to her plans to turnaround the bank. The lender now expects return on tangible common equity to be between 10% and 11% by the end of next year, according to a statement.

It had previously forecast the metric would be between 11% and 12% by that time.

Citigroup’s move confirms what analysts have warned: that the lender may find it hard to keep a lid on expenses while it implements a plan to overhaul operations around the world and strengthen internal controls that have frustrated regulators.

The bank said that for 2025, costs will be only slightly lower than the $53.8 billion it spent in 2024 as it makes continued investments in its businesses.

The buyback program is a “clear indication of the continued confidence that we have around the earnings momentum of our franchise,” Chief Financial Officer Mark Mason said on a conference call with journalists. “We’ve got a path on bringing our costs down.”

Fraser told investors in early 2022 that she would need five years to execute her turnaround of Citigroup, the only major US bank worth less than it was a half-decade ago. The bank’s return on tangible common equity in 2024 was 7%. That compares with the 22% that rival JPMorgan Chase & Co. reported on Wednesday.

https://finance.yahoo.com/news/citi-rolls-back-profit-target-130229014.html