Citi Shares Drop as CEO Warns of Higher Cost from Investments

(Bloomberg) -- Citgroup Inc.'s shares erased earlier gains as Chief Executive Officer Jane Fraser said the bank would "lean in with additional investments and other actions" if economic conditions remain favorable. Most Read from Bloomberg US Hits Iran With Strikes, Blockade as Trump Plans Hormuz Charge US CPI Falls for the First Time Since 2020, Core Gauge Flat Lindsey Graham, Senate Hawk Turned Trump Ally, Dies at 71 Trump Embraces Australian Retirement System Backed by Larry Fink A Cocaine Bust in Spain Leads All the Way to Wall Street "If conditions stay constructive, we intend to take advantage of that," Fraser said Tuesday on a call with analysts. "We'll lean in with additional investments and other actions to create value for our shareholders over the medium term." Shares pared their earlier gains, falling 5.7% following the comments. Citi earlier reported second-quarter earnings that beat expectations in key business lines. It's not clear what the bank's executives mean by additional investments. During a conference call with analysts, executives faced questions about why they'd left their full-year forecast for return on tangible common equity at 10% to 11% even though that metric has trended higher so far this year. Chief Financial Officer Gonzalo Luchetti also warned that the bank might have to set aside more for severance costs as it looks to streamline operations. "We're playing the long game," Fraser said. When the bank reported results for the first quarter in April, Fraser dismissed a Bloomberg report from late March that said the bank was exploring buying a retail bank or wealth brokerage. Citi is "only interested in and focused on organic growth," the CEO said at the time. Most Read from Bloomberg Businessweek Credit Card Holders Are Using 'Friendly Fraud' to Get Back at Retailers The Shattering of the Middle East's Most Unlikely Friendship Job Hunters Are Using AI to Cheat in Interviews, and Failing at the Office Washington Is Looking to Keep China From Training Its AI on US Models A $10 Jar of Tomato Sauce Is Reason to Celebrate ©2026 Bloomberg L.P. View Comments