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Citigroup's NII Rises Y/Y in 1H25: Will This Momentum Continue?
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Key Takeaways
{\"0\":\"Citigroups NII rose 8% y/y in 1H25 to $29.2M, driven by higher loan balances and deposit spreads.\",\"1\":\"C lifted its 2025 NII growth forecast (ex-Markets) to 4% from the prior stated 2-3%.\",\"2\":\"A stable rate backdrop and solid balance sheet trends support C\'s continued NII momentum.\"}
Citigroup, Inc. (C - Free Report) is demonstrating resilience and steady growth in its core banking operations, with net interest income (NII) showing an encouraging upward trend in 2025. In the first half of 2025, the company’s NII rose 8% year over year to $29.2 million. The rise was primarily driven by an increase in average deposit and loan balances, as well as higher deposit spreads.
Going forward, Citigroup’s NII outlook remains favorable, supported by a stable interest rate environment and solid balance sheet trends. While the Federal Reserve maintains a cautious approach due to ongoing global trade uncertainties and tariff-related pressures, interest rates are expected to hold steady in the near term, which bodes well for Citigroup.
The steady interest rate environment should ease pressure on funding and deposit costs, enabling the bank to preserve margins and capitalize on its expanding loan portfolio. Additionally, Citigroup’s broad geographic reach and well-diversified business model position it to navigate shifting economic and interest rate cycles effectively. These factors enhance its capacity to sustain NII growth in the upcoming period.
Reflecting its optimism, Citigroup’s management raised its 2025 NII guidance (excluding Markets) during its second-quarter earnings release. The bank expects NII to grow 4% year over year in 2025, up from the previously mentioned 2-3% rise. In 2024, Citigroup’s NII stood at $54.9 billion.
How C Compares With BAC & WFC in Terms of NII
Bank of America (BAC - Free Report) is also witnessing a rise in NII. In the first half of 2025, the metric rose 4.9% year over year to $29.1 million, driven by decent loan demand, higher-for-longer interest rates and a robust deposit balance. Though the Federal Reserve lowered interest rates last year, it is now pursuing a cautious rate-cutting approach because of tariff-related headwinds. Hence, interest rates are likely to remain high for longer. As such, Bank of America is expected to witness solid improvement in NII and net interest yield going forward. Bank of America expects a sequential rise in NII for each of the quarters this year, with annual growth of 6-7%.
On the contrary, Wells Fargo (WFC - Free Report) has been experiencing a declining trend in recent years. In the first six months of 2025, its net interest income (NII) dropped nearly 4% year over year to $23.2 billion. This decline was primarily driven by the effects of lower interest rates on floating-rate assets and unfavorable changes in the deposit mix. As interest rates are expected to remain relatively high in the near term, Wells Fargo’s NII is likely to remain under pressure in the near term. Wells Fargo expects its 2025 NII to be in line with the 2024 reported figure of $47.7 billion, indicating limited growth ahead.
C’s Price Performance, Valuation & Estimates
Shares of Citigroup have gained 33.9% year to date compared with the industry’s growth of 21.8%.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, C trades at a forward price-to-earnings (P/E) ratio of 10.43X, below the industry’s average of 14.33X.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for C’s 2025 and 2026 earnings implies year-over-year rallies of 27.4% and 27.7%, respectively. Estimates for 2025 and 2026 have been revised upward over the past 30 days.
Image: Shutterstock
Citigroup's NII Rises Y/Y in 1H25: Will This Momentum Continue?
Key Takeaways
Citigroup, Inc. (C - Free Report) is demonstrating resilience and steady growth in its core banking operations, with net interest income (NII) showing an encouraging upward trend in 2025. In the first half of 2025, the company’s NII rose 8% year over year to $29.2 million. The rise was primarily driven by an increase in average deposit and loan balances, as well as higher deposit spreads.
Going forward, Citigroup’s NII outlook remains favorable, supported by a stable interest rate environment and solid balance sheet trends. While the Federal Reserve maintains a cautious approach due to ongoing global trade uncertainties and tariff-related pressures, interest rates are expected to hold steady in the near term, which bodes well for Citigroup.
The steady interest rate environment should ease pressure on funding and deposit costs, enabling the bank to preserve margins and capitalize on its expanding loan portfolio. Additionally, Citigroup’s broad geographic reach and well-diversified business model position it to navigate shifting economic and interest rate cycles effectively. These factors enhance its capacity to sustain NII growth in the upcoming period.
Reflecting its optimism, Citigroup’s management raised its 2025 NII guidance (excluding Markets) during its second-quarter earnings release. The bank expects NII to grow 4% year over year in 2025, up from the previously mentioned 2-3% rise. In 2024, Citigroup’s NII stood at $54.9 billion.
How C Compares With BAC & WFC in Terms of NII
Bank of America (BAC - Free Report) is also witnessing a rise in NII. In the first half of 2025, the metric rose 4.9% year over year to $29.1 million, driven by decent loan demand, higher-for-longer interest rates and a robust deposit balance. Though the Federal Reserve lowered interest rates last year, it is now pursuing a cautious rate-cutting approach because of tariff-related headwinds. Hence, interest rates are likely to remain high for longer. As such, Bank of America is expected to witness solid improvement in NII and net interest yield going forward. Bank of America expects a sequential rise in NII for each of the quarters this year, with annual growth of 6-7%.
On the contrary, Wells Fargo (WFC - Free Report) has been experiencing a declining trend in recent years. In the first six months of 2025, its net interest income (NII) dropped nearly 4% year over year to $23.2 billion. This decline was primarily driven by the effects of lower interest rates on floating-rate assets and unfavorable changes in the deposit mix. As interest rates are expected to remain relatively high in the near term, Wells Fargo’s NII is likely to remain under pressure in the near term. Wells Fargo expects its 2025 NII to be in line with the 2024 reported figure of $47.7 billion, indicating limited growth ahead.
C’s Price Performance, Valuation & Estimates
Shares of Citigroup have gained 33.9% year to date compared with the industry’s growth of 21.8%.
Price Performance
From a valuation standpoint, C trades at a forward price-to-earnings (P/E) ratio of 10.43X, below the industry’s average of 14.33X.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for C’s 2025 and 2026 earnings implies year-over-year rallies of 27.4% and 27.7%, respectively. Estimates for 2025 and 2026 have been revised upward over the past 30 days.
Earnings Estimates
Image Source: Zacks Investment Research
Citigroup currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.