With a year-to-date (YTD) gain of 15%, Citigroup (C) is the best-performing major bank stock this year. The stock’s outperformance is not a 2026 thing; with gains of nearly 66% last year, it outperformed the broader markets and large bank peers by a good margin. The stock is up 87% over the last five years, while the Invesco KBW Bank ETF (KBWB) is up around 33%. Citi’s outperformance over the period could be attributable to the turnaround that CEO Jane Fraser has been leading since she took over the baton in March 2021. While “corporate turnarounds” is a much-abused term, Citi’s turnaround efforts are quite visible in its financials.
In Q1 2026, Citi reported revenues of $24.63 billion, which were up 14% year-over-year (YoY) and easily beat the $23.55 billion that analysts expected. Importantly, it was the highest quarterly revenue in a decade and is a testimony to how the turnaround actions are flowing to the income statement.
The performance on the bottom line was equally stellar, with earnings per share (EPS) rising 56% to $3.06, which was well ahead of the $2.65 that analysts expected. Citi’s return on average tangible common equity (RoTCE) was 13.1% in the quarter, which was above the 10%-11% that the company previously projected for the full year.
Notably, as part of the turnaround, Citi has exited several international markets, which has helped free up capital and led to an expansion of RoTCE. It has flattened its organizational structure, reduced bureaucracy, and is working to address the underlying issues that have put it in the crosshairs with regulators in the past. These issues not only put pressure on Citi’s earnings and return ratios but also meant that it traded at a discount to large banks.
Meanwhile, Citi’s turnaround is now nearing completion. As Fraser said in her prepared remarks in the Q1 earnings release, “We’ve entered into the final phase of our divestitures, and 90% of our transformation programs are now at or near our target state.”
The next key trigger for C stock would be the Investor Day that’s set for May 7. At that event, the management is expected to provide long-term plans. These include updates on its artificial intelligence (AI) strategy and how it plans to leverage the technology to cut costs, improve compliance, and offer personalized services to customers. The bank is also expected to provide long-term RoTCE and efficiency goal targets and lay out the vision to grow all five of its business segments organically and sustainably.
