Citigroup

Priority use of capital has shifted toward buybacks and dividends as transformation frees capacity. Management announced a multiyear repurchase program (up to $20 billion), increased the common dividend after the 2025 stress test, and continued to streamline by exiting legacy consumer markets.

The Banamex 25% sale crystallizes some value while preserving optionality to IPO the remainder; proceeds help capital returns while the institutional franchise in Mexico is retained. We view the simplification and sale discipline favorably.

Offsets: capital tied to transformation, residual stranded costs, and the need to maintain elevated buffers amid evolving Basel endgame rules. Capital allocation is directionally sound but must be balanced against regulatory milestones and durable RoTCE lift.