FINANCIALS: Citigroup (C AA/A/A+) - Q4 Results

Jan-15 16:24

Citigroup (C AA/A/A+) - Q4 Results 

While a beat to expectations, and expectations are for continued improvement, the weakest of the US banks that report today

  • Net interest income $13.19bn, -1.3% from Q3 and -4.6% vs Q4 23.
  • Commission and fee income and other income down -5.1% and -28.6% respectively vs Q3, one offs in other income in Q4 23 make that a uninformative comp.
  • They have done well on expenses, which are -1% QoQ and -17.6% vs one year ago, with most of the improvement flowing through the 'other operating expense' category.
  • CET1 improves to 13.6%. Up 101bps from net income. Distributions subtract -58bps and RWA increases subtract a further -31bps.
  • Impaired loans were lower, but so was total loans, so LLR edges up so 35bps and % impaired loans climbs to 0.36%.
  • OpInc/RWA falls back down to 1.3% and RoTE was 7% for 2024, and improvement from 4.9% in 2023 and targeting higher than this in 2025, to reach 10-11% in 2026. While not stellar this would be an improvement likely worth of potentially increasing a notch on the ratings if managed.

Valuation: Citi arguably trades a little expensive for its rating in EUR, it seems the market is either complacents or has a high probability for that RoTE improvement discussed in the last bullet above priced in. Nonetheless the bonds could probably still trades 5bps back of where they are currently. 

 

 

Historical bullets

OPTIONS: Expiries for Dec17 NY cut 1000ET (Source DTCC)

Dec-16 16:17
  • EUR/USD: $1.0475(E618mln), $1.0525(E1.6bln), $1.0650(E1.8bln)
  • USD/JPY: Y151.55-70($1.1bln), Y154.45($538mln)
  • GBP/USD: $1.2640-55(Gbp763mln), $1.2840-50(Gbp1.0bln)
  • USD/CAD: C$1.3930($1.5bln), C$1.4150($1.3bln)

FED: US TSY 26W AUCTION: NON-COMP BIDS $1.914 BLN FROM $72.000 BLN TOTAL

Dec-16 16:15
  • US TSY 26W AUCTION: NON-COMP BIDS $1.914 BLN FROM $72.000 BLN TOTAL

FED: US TSY 13W AUCTION: NON-COMP BIDS $2.104 BLN FROM $81.000 BLN TOTAL

Dec-16 16:15
  • US TSY 13W AUCTION: NON-COMP BIDS $2.104 BLN FROM $81.000 BLN TOTAL