Citigroup chief financial officer Gonzalo Luchetti told the Barclays 24th Annual Global Financial Services Conference on Monday that the bank now expects full-year 2026 return on tangible common equity to exceed 11%, above its prior guidance range of 10% to 11%.
The upgraded outlook came alongside disclosure of a new $30 billion share buyback authorisation, following completion of a prior $20 billion programme. Luchetti said Citigroup repurchased $10.3 billion of stock in the first half of 2026 and expects full-year buybacks to exceed the approximately $13 billion repurchased in 2025.
BANAMEX STAKE CONTINUES TO SHRINK
Luchetti confirmed that Citigroup's ownership of Mexican unit Banamex has fallen to 51%, with deconsolidation expected in early 2027. The gradual reduction in Citigroup's stake reflects the bank's long-running plan to separate Banamex through an initial public offering, a process that has been closely watched by investors tracking the group's simplification strategy under chief executive Jane Fraser.
The CFO also addressed the bank's cost base, saying Citigroup expects its 2026 efficiency ratio to come in slightly better than 60%. He noted that stranded costs, a legacy of the bank's ongoing restructuring, have been reduced from $1.3 billion annually to about $200 million per quarter, pointing to steady progress in eliminating expenses left behind by earlier divestitures and reorganisation.
BUYBACKS SIGNAL CAPITAL CONFIDENCE
The scale of the new buyback authorisation, twice the size of the one it replaces, points to management's confidence in the bank's capital position as it works through its multi-year transformation programme. Luchetti's comments at the Barclays conference add to a series of updates from major US banks this week on trading, investment banking and capital return plans, as lenders use the event to frame expectations ahead of third-quarter results.
Citigroup's remarks were delivered in a press release accompanying the conference appearance, with the bank framing the improved ROTCE guidance and expanded buyback capacity as evidence that its efficiency and simplification efforts are translating into stronger returns for shareholders.
The reduction of Citigroup's Banamex stake to 51%, with full deconsolidation expected in early 2027, marks a further step in a separation process the bank has pursued over several years as part of its wider strategy to simplify its geographic footprint and concentrate capital on higher-returning businesses. Investors have tracked the pace of the Banamex exit closely as a proxy for how quickly Citigroup can redeploy capital previously tied up in the Mexican consumer and commercial banking unit.
Luchetti's presentation combined the improved profitability outlook with detail on cost discipline and capital return, giving investors at the Barclays conference a fuller picture of how the bank's transformation efforts, spanning efficiency, buybacks and portfolio simplification, are progressing together heading into the final quarter of the year.
The scale of the $30 billion buyback authorisation, alongside first-half repurchases of $10.3 billion and an expectation that full-year 2026 buybacks will exceed the roughly $13 billion executed in 2025, illustrates the pace at which Citigroup is now able to return capital following completion of its prior $20 billion programme. Combined with the improved efficiency ratio guidance of slightly better than 60% and the steep reduction in stranded costs from $1.3 billion annually to about $200 million per quarter, Luchetti's remarks at the Barclays conference painted a picture of a bank whose multi-year restructuring is increasingly translating into both stronger returns and greater capital flexibility for shareholders.