Fitch Affirms Citigroup Inc. at 'A'/'F1'; Outlook Revised to Positive

Published: 2026-05-04 07:35:19 ET C

Published on 05/04/2026 at 07:35 am EDT

Fitch Ratings has affirmed Citigroup Inc.'s (Citi) Long- and Short-Term Issuer Default Ratings (IDRs) at 'A' and 'F1', respectively, and has also affirmed Citi's Viability Rating (VR) at 'a'.

In addition, Fitch has affirmed the IDRs of related entities Citibank, N.A (CBNA), Citibank Canada, Citibank Europe Plc, Citigroup Global Markets Holdings Inc., Citigroup Global Markets Limited, Citigroup Global Markets, Inc., Citigroup Energy Inc. and Citigroup Global Markets Australia Pty Ltd.

The Rating Outlook is revised to Positive from Stable reflecting progress in the firm's strategic execution, gradually leading to improving earnings quality and lower risk profile from the reduction of operational and regulatory risks, supported by organizational simplification and structural technological investments.

Key Rating Drivers

The ratings reflect Citi's scale, diversification and leading franchises, particularly in cash management for institutional clients with cross-border operations. The Positive Outlook reflects Citi's structural improvements to its business model, resulting in stronger earnings power. Fitch also expects Citi to complete its comprehensive transformation over the rating horizon, including system upgrades and full remediation of regulatory findings.

Global Footprint and Franchise: Citi has a presence in approximately 95 countries with roughly 60% of credit exposure based in the U.S. Fitch views Citi's business model as resilient even under a hypothetical adverse scenario that assumes a sustained oil shock through the end of 1H26. Like all global banks, Citi is predominantly exposed to second order impacts related to market disruptions, reduced client activity and lower consumer spending, with minimal direct exposure to the Middle East or vulnerable sectors such as aviation.

Transformation Yields Stronger Performance: Fitch views Citi's multiyear strategic execution as having reduced the bank's risk profile while strengthening earnings power, supported by major divestitures, business re-segmentation, organizational simplification and control enhancements. In 2026, cross-segment revenue growth and declining transformation expenses position Citi for sustained improvements in profitability.

Strategic Execution Lowers Risk: Fitch sees Citi's post-2021 strategic execution as lowering operational, compliance and litigation risk. However, outstanding consent orders continue to constrain Fitch's assessment of Citi's risk profile. Evidence of successful remediation to date includes the Office of the Comptroller of the Currency's termination of its 2024 consent order amendment, 90% completion of transformation workstreams after $12 billion in cumulative transformation investments from 2022-2025 as well as a marked decline in operational or litigation losses.

Stable Credit Quality: Fitch views Citi's asset quality as anchored by a high-quality, investment-grade corporate book, offset by a sizable credit card portfolio (22% of loans at end-1Q26) that drives net charge-offs and provisioning. Impaired loans as a share of gross loans have moved within a tight range of 1.0%-1.1% since 2022 compared to a 10-year average of 1.3%. Net charge-offs of 1.3% as a share of average loans have normalized in 2025 above the 10-year average of 1.0% but are running below guided ranges.

Structural Earnings Improvement: In 1Q26, Citi reported its most profitable quarter since 2Q21, with a return on equity (ROE) of 11.5%, compared to a 10-year average ROE of 6.4%, a weak level relative to peers. However, Fitch expects sustained earnings improvement as transformation spending declines and exits from less strategic activities reduce operational drag. Management's 2026 return on tangible common equity target of 10%-11% (from 8% in 2025) is viewed as credible and consistent with Fitch's base case for operating profit at or above 1.8% of risk-weighted assets (RWAs).

Stronger Internal Capital Generation: Improved internal capital generation supports capitalization. Citi's standardized common equity Tier 1 (CET1) ratio declined to 12.7% at end-1Q26 (13.4% at end-1Q25) or 110 bp above requirements. While Citi's advanced CET1 ratio of 11.7% at end-1Q26 sits at the low end of global peers, Citi compares favorably on leverage and tangible common equity measures.

Stable Institutional Deposits and Robust Liquidity: Citi's deposits are predominantly institutional and uninsured (79% at YE25), with moderately higher funding costs versus commercial-bank peers. Its leading global cash-management franchise (55% of deposits) consists primarily of operating accounts and provides a stable source of funding. Liquidity is robust, with average high quality liquid assets of $607 billion at YE25 (115% of estimated net outflows) and total available liquidity resources exceeding $1 trillion (equivalent to roughly 70% of deposits).

Holdco Viability Rating (VR) Equalized with Opco: Citi and CBNA's group VR reflects the correlated performance or failure rate between the bank holding company and the bank. At YE25, Citi's common equity double leverage was 119.5% without considering the preplaced liquidity and capital available to subsidiaries through the intermediate holding company, Citicorp LLC.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Evidence of inadequate regulatory remediation progress could result in a revision of the Outlook to Stable. New material regulatory findings or significant operational losses could prompt a downgrade;

A failure to maintain a 100-bp management buffer above Citi's minimum CET1 requirement or an inability to maintain operating profit above 1.5% of RWAs could prompt a revision of the Outlook. A decline in Citi's standardized CET1 ratio below 12% could also prompt a downgrade;

Ratings are sensitive to a negative change in the Services segment's competitive position, evidenced by client or deposit attrition.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Strengthened business profile demonstrated by structurally sustained run rate operating profit of at least 2% of RWAs, an efficiency ratio of 60% or below, and broad-based revenue growth comparable to that of higher-rated peers, combined with a lifting of the 2020 consent orders, could result in an upgrade, particularly if accompanied by an absence of material operational, regulatory or litigation losses.

Fitch notes that ratings of banks operating in developed resolution regimes could be affected if its 'Exposure Draft: Bank Rating Criteria' is implemented as proposed upon conversion into final criteria.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

The Short-Term IDR of 'F1' is at the lower of two potential levels that map to the respective Long-Term IDR of Citi and affiliates, reflecting Fitch's assessment of Citi's funding and liquidity profile.

The long-term deposit rating of 'AA-' assigned to CBNA is one notch higher than CBNA's Long-Term IDR to reflect superior recovery prospects in the event of a default given depositor preference in the U.S. Fitch assigns CBNA a short-term deposit rating of 'F1+', which corresponds with CBNA's long-term deposit rating.

Senior unsecured debt is rated in line with the respective issuing entities' IDRs, as Fitch views a default on these obligations as equivalent to a default of the issuing entity.

Derivative counterparty ratings (DCRs) of Citigroup, CBNA, Citigroup Global Markets Limited and Citigroup Global Markets, Inc. are equalized with their Long-Term IDRs because they have no definitive preferential status over other senior obligations in a resolution scenario. Therefore, the DCR ratings will move in line with the companies' respective IDRs. These ratings have been assigned because the companies are either engaged in significant derivatives activity or are counterparties to Fitch-rated structured finance transactions.

Subordinated debt and other hybrid capital issued by Citi are notched down from the group VR in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profiles, which vary considerably. Citi's subordinated debt rating reflects the baseline notching for loss severity of two notches from the VR.

Citi's preferred stock rating is four notches from its VR, which encompasses two notches for non-performance and two notches for loss severity. The preferred stock ratings of Citigroup Capital III and Citigroup Capital XIII are also four notches from Citi's VR.

Citi and CBNA's Government Support Rating of 'ns' reflects Fitch's view that senior creditors cannot rely on receiving full extraordinary support from the sovereign if the group becomes non-viable. The Dodd-Frank Orderly Liquidation Authority legislation provides a framework for imposing losses on holding company senior creditors before sovereign support is extended.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

The Short-Term IDR would be sensitive to a change in the respective entities' Long-Term IDRs or a change in Citi's funding and liquidity profile. Senior debt ratings, deposit ratings and DCRs, where assigned, are primarily sensitive to changes in the respective issuers' Long-Term IDRs.

Subordinated debt and other hybrid ratings are primarily sensitive to any change in Citi's VR.

SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS

Material Domestic Subsidiaries: The Long-Term IDRs of the U.S. operating entities - CBNA, Citigroup Global Markets Holdings Inc. and Citigroup Global Markets Inc. (U.S. broker dealer) - are one notch higher than Citi's Long-Term IDR. This reflects Fitch's belief that the U.S. single-point-of-entry resolution regime, the implementation of total loss-absorbing capacity requirements for U.S. global systemically important banks and the presence of substantial external debt buffers reduce the default risk of the domestic operating subsidiaries' senior liabilities relative to holding company senior debt.

Fitch has assigned a Shareholder Support Rating (SSR) to Citigroup Global Markets Holdings Inc. and Citigroup Global Markets, Inc. of 'a', in line with Citi's Long-Term IDR of 'A'. Long-Term IDRs can be assigned above the SSR and/or VR based on protection to creditors provided by intra-group resources, as detailed in a group's resolution plan.

Material International Subsidiaries: The Long-Term IDRs of Citibank Europe Plc and Citigroup Global Markets Limited (international broker dealer) have also been notched above Citi's Long-Term IDR. This decision was based on accepted resolution plans that identify these key foreign subsidiaries as beneficiaries of intra-group resources, among other factors.

Fitch has affirmed the SSR of Citigroup Global Markets Limited at 'a', in line with Citi's Long-Term IDR. Fitch has assigned to Citibank Europe Plc an SSR of 'a+', in line with the Long-Term IDR of its direct parent, Citibank, N.A.

Other Subsidiary: Although not designated as a material legal entity, Citibank Canada's activities are integral to the group's business and strategy in Fitch's view. Its Long-Term IDR is equalized with Citi's Long-Term IDR of 'A', reflecting Fitch's view of a high likelihood of support by the parent in case of need. Fitch has assigned to Citibank Canada an SSR of 'a' in line with the VR of its parent, Citibank, N.A.

SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES

Material Domestic Subsidiaries' Rating Sensitivity: The Long-Term IDRs of Citi's material domestic subsidiaries would be sensitive to a change in Citi's Long-Term IDR. Fitch could downgrade the Long-Term IDRs to the level of Citi's if Fitch no longer believes the subsidiaries' probability of failure is lower than their parents', a situation that could result from changes to Citi's resolution plan or a reassessment of the plan's credibility, a change in internal or external buffers or the presence of high levels of poorly reserved problem assets. Fitch notes that CBNA, like all U.S. bank operating subsidiaries, is cross-guaranteed under the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

Material International Subsidiaries' Rating Sensitivity: The Long-Term IDRs of material international subsidiaries are similarly sensitive to changes in Citi's Long-Term IDR. Ratings could be downgraded to Citi's level because of changes to Citi's approved resolution plan, which identifies these foreign subsidiaries as beneficiaries of intra-group resources. In addition, the ratings are sensitive to country ceiling and sovereign risk constraints.

Other Subsidiary Rating Sensitivity: Citibank Canada's ratings would be sensitive to the same factors that might drive a change in Citi's Long-Term IDR.

VR ADJUSTMENTS

The Business Profile score has been assigned at 'a+' below the implied score of 'aa' due to the following adjustment reasons: Business model (negative).

The Funding & Liquidity score has been assigned at 'a+' below the implied score of 'aa' due to the following adjustment reason: Non-deposit funding (negative).

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Citibank Canada has an ESG Relevance Score of '4' for Governance Structure due to regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citibank Europe Plc has an ESG Relevance Score of '4' for Governance Structure due to regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citibank, N.A. has an ESG Relevance Score of '4' for Governance Structure due to regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citigroup Global Markets Funding Luxembourg S.C.A. has an ESG Relevance Score of '4' for Governance Structure due to 2020 regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citigroup Global Markets Holdings Inc. has an ESG Relevance Score of '4' for Governance Structure due to 2020 regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citigroup Global Markets Limited has an ESG Relevance Score of '4' for Governance Structure due to 2020 regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Citigroup Global Markets, Inc. has an ESG Relevance Score of '4' for Governance Structure due to 2020 regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors.

Citigroup Inc. has an ESG Relevance Score of '4' for Governance Structure due to 2020 regulatory actions indicative of legacy governance shortcomings, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

RATING ACTIONS

Entity / Debt

Rating

Prior

Citigroup Global Markets Limited

LT IDR

A+

Affirmed

A+

ST IDR

Affirmed

DCR

A+(dcr)

Affirmed

A+(dcr)

Shareholder Support

Affirmed

Citigroup Capital III

preferred

BBB-

Affirmed

BBB-

Citibank Canada

LT IDR

Affirmed

Shareholder Support

Affirmed

Citibank Europe Plc

LT IDR

A+

Affirmed

A+

ST IDR

Affirmed

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The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

APPLICABLE CRITERIA

Bank Rating Criteria (pub. 22 Mar 2025) (including rating assumption sensitivity)

Financial Institutions Climate Vulnerability Rating Criteria (pub. 09 Dec 2025)

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