One of the largest financial holdings in the United States, Citigroup, reported on the results of the fourth quarter of 2022. The data turned out to be ambiguous – but it was difficult to expect anything else:

• net income -20% YoY to $2.5 billion, or $1.1 per share;
• revenue +5.8% to $18 billion;
• net interest income +22.7% to $13.3 billion;
• return on capital of 5%.

The decrease in the volume of the loan portfolio against the background of the closure of a number of retail units negatively affected the component of net interest income – the indicator could have been higher.

The “thin” place in the reporting was expected to be the revenue component from investment banking services. The indicator fell by 58.5% and amounted to $645 million. This is due to a sharp decline in activity in the M&A sector in the world. Institutional clients allowed to increase revenue in this direction by 2.8%, retail banking and capital management brought another 5.4%.

Operating expenses decreased against the background of a high base of the previous period.

Citigroup continues to create reserves ($640 million) in case of possible credit losses, so part of the finances “leaks” here.

The corporation continues to pay dividends: the dividend yield on securities is 4-4.5%, which is one of the highest levels in the US banking segment.

We are moving our previous target for Citigroup securities in the range of $64-66 for the current year.

On the daily trading chart of Citigroup shares, the MACD indicator is growing in a positive zone and signals a purchase. The Stochastic oscillator has risen into the overbought zone and also signals a purchase.