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Citigroup Earnings Announcement


Citigroup Earnings Announcement
October 14th 2021

Citigroup, one of the ‘big’ four U.S. banks and the third largest in the country will announced earnings on Thursday 14th October 2021. With operations in 160 countries and over 200 million customer accounts, the bank is considered ‘systemically significant’ by the Financial Stability Board. Compared with industry peers the bank has underperformed since the global financial crisis. Last year represented a challenge for the bank, not only facing the fallout of a global pandemic, but also, the issuance of a $400 million dollar fine for breaches in risk management and compliance from the regulator.

There are signs that a turnaround may be underway for the bank, as new CEO Jane Fraser, has put in place plans to reduce inefficiencies in the consumer banking division, reducing the global footprint in 13 markets where the bank has failed to remain competitive. Fraser is betting on the wealth management and investment banking divisions which have outperformed in terms of returns. Further, given the low valuation of the bank compared to peers, a share-repurchasing plan is being implemented with the excess cash and profits from quarterly earnings. The pace of repurchases are anticipated to have increased in the last quarter as the Fed lifted restrictions on share repurchasing activities on June 30. The bank is also expected to accelerate the pace of dividend issuance as payout restrictions were also lifted.

Earning reports have been impressive for the bank in recent quarters with an average positive earnings surprise of 43.9%. Consensus estimates suggest that earning per share will reach $1.68, representing a 20% rise on earnings last year. Revenue is set to fall marginally when compared with the previous year at $17.01 billion. There has been a 14% rise in the stock price since the start of the year and the bank has registered a marginal underperformance when compared with the S&P500 on a year-to-date basis. Nevertheless, the stock remains a consensus ‘Buy’ with an average price target of $85.

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