Will Citigroup's Prudent Expense Management Support Performance?

Citigroup, Inc.'s C CEO Jane Fraser is executing a sweeping overhaul of the bank to enhance its performance and reduce costs. The company made changes to its operating model in the fourth quarter of 2023. The reorganization trimmed management layers and now operates under eight layers rather than 13.

In January 2024, the company announced a plan to eliminate 20,000 jobs as part of its broad-scale restructuring effort over the next two years.

In June 2025, Citigroup announced the next phase of changes in its Technology and Business Enablement organization as part of the simplification efforts. As part of this move, C will reduce the size of its technology employee workforce in its China Citi Solution Centers (CSCs) in Shanghai and Dalian by approximately 3,500. The company expects the technology changes in its China CSCs to be completed by the start of the fourth quarter of 2025.These reductions follow other consolidations that Citigroup has executed throughout its global real estate footprint in several locations in the United States, as well as Indonesia, the Philippines and Poland, as a result of reductions in its workforce.

Such optimization of management layers and reduction in functional roles will drive $2-2.5 billion annualized run rate savings by 2026. For 2025, Citigroup expects expenses below $53.4 billion. In 2024, the company’s expenses were $53.9 billion.

How C Competes With BAC & WFC in Expenses

Bank of America's BAC prudent expense management supported its financials in the past. However, expenses have been rising over the past few years due to Bank of America’s continued investments in its franchise. For 2025, Bank of America’s non-interest expenses are expected to rise 2-3%.

Wells Fargo's WFC prudent expense management initiatives support its financials. Since the third quarter of 2020, Wells Fargo has been actively engaging in cost-cutting measures, including the streamlining of its organizational structure, closure of branches and reduction in headcount. Wells Fargo’s non-interest expenses for 2025 are expected to be $54.2 billion, whereas it reported $54.6 billion in 2024.

C’s Price Performance, Valuation & Estimates

Shares of Citigroup have gained 13.1% year to date compared with the industry’s growth of 12.3%. 

Price Performance

From a valuation standpoint, C trades at a forward price-to-earnings (P/E) ratio of 9.50X, below the industry’s average of 13.94X.

Price-to-Earnings F12M

The Zacks Consensus Estimate for C’s 2025 and 2026 earnings implies year-over-year increases of 24.2% and 24.8%, respectively. The estimates for 2025 have been revised downward, while those for 2026 have been revised upward over the past 30 days.

Estimates Revision Trend

Citigroup currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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