Citigroup (C) Last Update 11/16/22
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TREFIS Analysis

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Citigroup Company


  1. Institutional Clients Group (Advisory & Underwriting, Sales & Trading, Treasury & Trade Solutions) constitutes 76% of the Trefis price estimate for Citigroup's stock.
  2. Personal Banking & WM constitutes 24% of the Trefis price estimate for Citigroup's stock.


Latest Earning

In Q3 2021, Citigroup reported Total Revenues of $18.5 billion, up 6% y-o-y. It was primarily driven by the gain on sale of the Philippines consumer business versus a loss on sale of the Australia consumer business in the prior-year period.

Impact of coronavirus outbreak

The economic downturn could cause significant losses for businesses and individuals, impacting their loan repayment capability. This could result in sizable losses for Citigroup, as it has a substantial loan portfolio of consumer and commercial loans. Further, as the economy slows down, it will likely become expensive for the bank to attract funding, negatively impacting all its operations. Further, the lower interest rate environment is likely to hurt the bank's net interest income. That said, the bank’s Sales & Trading operations are likely to drive positive revenue growth due to higher trading volumes, reducing the impact of weak revenues in other segments.

While the company’s results for Q2 2020 saw year-on-year growth in total revenues, the bank reported a decrease in Q3 and Q4. Overall, Citigroup's full-year 2020 revenues were around $74.3 billion - at par with the previous year's figure. The bank has delivered positive growth in Sales & Trading and investment banking segments. However, the same is not reflected in its earnings, as C has increased its provisions for credit losses to counter the risk of loan defaults on its sizable loan portfolio. On the flip side, the loan repayment capacity of the customers is tied to the economic slowdown. As the economy moves toward normalcy, the financial health of its customers is likely to recover, reducing the risk of loan defaults.

The company posted total revenues of $71.9 billion in 2021, which was 5% below the year-ago period. The revenues mainly suffered due to lower consumer banking revenues. The net interest income improved over the first three quarters of 2022 due to interest rate hikes and loan growth. We expect the trend to continue over the subsequent quarters.


Below are key drivers of Citigroup’s value that present opportunities for upside or downside to the current Trefis price estimate for the banking group:

Sales & Trading

  • Debt Capital Deployed: Citigroup’s debt trading desk saw its asset base swell from $288 billion at the end of 2006 to $414 billion in 2007. Following the global economic crisis, this figure fell steadily to below $176 billion by 2016 before trending upwards over 2017-18. The figure gradually grew to $258 billion in 2021.
  • Investment Banking EBT Margin: Citigroup’s investment banking business has reported margins of around 40% over 2013-2015, with the figure improving to over 45% in 2017 due to the bank’s cost-cutting efforts. The figure fell slightly to 42.8% in 2018 before increasing to 46.2% in 2021. We expect it first to decrease and then remain largely constant going forward. However, if these margins fall to 35% over our forecast period, there would be a downside of over 5% to the current price estimate.
For additional details, select a driver above or select a division from the interactive Trefis split for Citigroup at the top of the company page.


Citigroup is a leading global financial services holding company with operations in over 160 countries. The company offers consumer banking, credit cards, corporate and investment banking, securities brokerage, and wealth management services worldwide to corporate, institutional, government, and individual customers.


Below are some key sources of value for Citigroup:

Sales & Trading

Citigroup generated nearly $24.2 billion in revenues from its sales & trading business in 2021. In comparison, the consumer banking business generated $27.3 billion for the same period. At the same time, Citigroup has achieved a higher operating margin of 46% for its investment banking business compared to about 29% for its consumer banking business. As a result of this, the bank’s Sales & Trading division is the primary source of value, according to our estimates.

Consumer Banking Yields Greater than Treasury & Trade Solutions

Citigroup has decided to focus on its core consumer banking business after suffering severe losses during the subprime crisis. This move also came about due to pressure from the U.S. government, which had to bail out the company. The consumer banking business earned a net interest margin of 6.4% over 2014-18 on a loan base of around $150 billion. In comparison, the company had treasury client assets worth around $450 billion in its Treasury & Trade Solutions business in 2018, on which it earned roughly 2% in fees. As the company focuses more on the consumer banking business, we expect solid asset growth even as the yield figure remains significantly higher.


Regulatory reforms expected to pressurize revenue growth going forward

Increased regulation of the financial industry is expected to reduce the top line for most financial institutions. In the past, decreased regulation led to greater risk-taking for many parts of the businesses, which drove earnings growth. Stricter regulation has affected the banking industry in several ways:
  • Banks are now required to hold additional amounts of capital, which can potentially slow growth
  • The CARD Act passed by Congress has clipped card income by prohibiting issuers from raising rates, fees, or finance charges on existing balances or prospective accounts in the first year
  • The Volcker rule has forced banks to scale back trading operations
  • Securitization has become less appealing, as investors and regulators demand that banks retain some risk as well

Dominant position in investment banking

Citigroup holds a strong position in the global investment banking space - and has been able to grab a larger share of the emerging market share compared to its peers due to its geographically diversified business model.

Consolidation expected to continue

As a result of the financial crisis, the banking industry saw a period of mergers and consolidation. The financial crisis has seen nearly 15-20% of the market share change hands. The banking industry continues to see consolidation in almost every aspect of the business as players try and globalize and seek scale. Due to uncertainty, customers are also increasingly becoming more risk-averse and turning to larger players with stronger deposit bases. The number of operating commercial banks declined from 7,630 in 2004 to less than 4,800 by the end of 2018.