2024-07-16 08:42:38 ET
Summary
- Citigroup's Q2 results were better than expected on a core basis, with a $0.13/beat at the core pre-provision profit line on stronger than expected capital markets and commercial banking.
- The Services business is a strong asset for Citi, with a durable moat, strong share in high-margin treasury services, and ongoing growth potential, and commercial banking looks fixable.
- Retail banking (including cards) and wealth management need a lot more work, and Citi's rivals are targeting many of the same markets and customers and doing so more effectively.
- Management's expectations for 2026 ROTCE still seem too high, but double-digit ROTCEs may finally be in sight and the valuation is still not demanding relative to peers.
It has taken a painfully long time, and there is still a lot of work to do, but Citigroup (C) is finally getting some credit for the multiyear turnaround efforts that have significantly changed the bank’s earning profile today and into the future. There is still a lot of work to be done, and I think Citi is going to struggle to hit some of its targets, but progress is progress and there are still businesses here worth more than the share price suggests....
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For further details see:
Citigroup's Turnaround Story Getting Taken A Little More Seriously Now