Citigroup Services Business Demonstrates Strong Performance & Growth Potential
Citigroup NYSE: C continues to showcase significant upside potential, according to recent commentary from Shahmir Khaliq, Head of Services at the financial institution. Addressing conference attendees, Khaliq detailed the Services division’s strategic focus on bolstering technology, cultivating talent, and enhancing client relationships to expand market share and improve overall profitability. This approach is designed to assist global clients in navigating a complex macroeconomic and geopolitical landscape.
Khaliq, who assumed the role of Head of Services in 2023 following organizational restructuring initiated by CEO Jane Fraser, articulated the Services segment as a unified entity encompassing the bank’s Treasury and Trade Solutions (TTS) – covering payments, liquidity management, and trade financing – alongside Securities Services, including Investor and Issuer Services. He positioned Services as a globally expansive operation, functioning as “the world’s biggest transaction services platform” across 95 international markets.
Navigating Client Priorities in a Volatile Global Environment
Since the investor days held in 2022 and 2024, Citigroup’s Services division has prioritized investment in its platform and fostering effective client engagement amidst ongoing global challenges. Khaliq highlighted that client conversations remain “robust,” despite concerns surrounding issues like U.S.-China relations, the Russia-Ukraine conflict, the situation in Venezuela, and evolving U.S. trade policies impacting supply chains.
The priorities articulated by clients differ based on their specific segments. Corporate clients are focused on securing capital and financing, maintaining efficient global treasury operations, ensuring uninterrupted supply chains, optimizing working capital, and maximizing free cash flow. Banks and broker-dealers prioritize achieving best execution at the lowest possible cost across their retail, wealth management, and market activities. Public sector entities seek greater efficiency in payment systems and the management of treasury bills and securities, particularly given current fiscal deficits. Asset managers are shifting towards private markets and refining their middle- and back-office structures, while also striving to reduce costs to enhance public holdings performance. Finally, Fintech companies are driving demand for “Banking-as-a-Service” and integrated “Bank-in-a-Box” solutions, leveraging Citi’s extensive client base within the fintech industry.
Record Results & Exceeding Performance Targets in 2025
Citigroup’s Services division reported a “record fourth quarter” and achieved full-year 2025 revenue of $21.3 billion, representing an 8% increase year-over-year. The division also posted a Return on Tangible Common Equity (ROTCE) of 28.6%, slightly surpassing the targets outlined during investor day presentations. This strong performance was driven by growth in both net interest income (NII), up approximately 12%, and fees, which increased by 6%.
Several key operating metrics underpinned these results. Deposits rose by roughly 7% year-over-year, while the loan book expanded by approximately 9%. Cross-border volumes, measured in dollar terms, increased by 10%, and clearing volumes grew by 5%. Notably, Assets Under Custody and Administration (AUC/A) experienced a substantial increase of 24%, outpacing the MSCI growth rate of around 17%, indicating significant net new inflows. The business also achieved a “record number of new wins” in 2025, setting a positive trajectory for 2026.
Future Growth Driven by Innovation and Strategic Investments
Looking forward, Khaliq emphasized that future growth will be fueled by three core strategies: deepening engagement with large institutional clients – including those within the Fortune 500, where Citi serves over 80% – expanding market share with Commercial Bank clients, and aligning client strategies with ongoing product modernization and innovation initiatives. He underscored the importance of “innovation is all about integration,” emphasizing Citi’s commitment to commercializing new capabilities by seamlessly integrating them into existing services and anchoring them with key clients.
Several initiatives are underway, including the application of Artificial Intelligence (AI) across various functions, from technology and agent support to client interactions and operations. Citi is also pioneering Single Event Custody Processing for asset servicing, aiming to streamline processes and reduce manual intervention, and implementing Citi Payment Express, currently live in 22 markets with 40% of payment flow transactions now utilizing the new infrastructure. Further advancements include 24/7 clearing, currently used by approximately 300 banks, and the development of digital asset capabilities, including an internal blockchain network processing “billions of dollars” in client funds monthly. Khaliq affirmed Citi’s commitment to building “the infrastructure of the future” while adapting to evolving client needs and industry trends.
