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Citigroup: we keep the goal in force

Citigroup: we keep the goal in force

20 January 2023

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.

20 January 2023
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