In the lean years following the financial crisis, Citigroup Inc. made an unintentional bet on the future of banking, and it is starting to pay off.

While Bank of America Corp. and JPMorgan Chase & Co. were gobbling up cheap deposits at their thousands of branches around the U.S., Citigroup was shrinking its footprint, focusing on a handful of big cities to right itself after its near-collapse.

Now...