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Citigroup (C) CFO Sees Consent Order as a Multi-Year Strategy
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At a conference held on Wednesday, Citigroup’s (C - Free Report) CFO Mark Mason said that he looks upon the consent order, issued by federal regulators, as a multi-year strategy that will help transform the lender.
The order was issued in October after the company erroneously transferred $900 million to several lenders of the cosmetics brand, Revlon.
Mason said, “We do expect that we will not only have improvements in the way we run our operations, but be in a better position to compete with other players and in a better position to serve our clients to offer and introduce new and innovative solutions to our clients.”
Notably, management is eyeing this as an opportunity to bolster risk controls and enterprise risk control framework. Also, the process will require Citigroup to digitize some of its operations. It is even expected to make the lender compete better with its peers by enabling it to offer and introduce new and innovative solutions.
Also, Mason mentioned that the company is planning the strategy for 2021 and he already expects costs tied to the transformation investments to be “up a couple percent” next year.
At the conference, Mason separately mentioned that the lending scenario is expected to pick pace in the second half of 2021. Some of the upward pressure in consumer loans is expected from the promotional credit card offerings that Citigroup is expected to introduce in that period. Also, corporate lending is likely to rise with business activities expected to return to normal levels.
On the revenue front, Mason sees a flat trend for 2020, with consumer unit and institutional side of the business continuing to be affected by low rates and reduced levels of activity.
Also, owing to strong markets performance, revenues from trading businesses, fixed income and equities are likely to be up in the mid-teens. On the investment banking side, revenues might decline in low double-digits year over year, due to an exceptionally strong fourth quarter last year.
Conversely, other Wall Street firms including, JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Bank of America (BAC - Free Report) have given upbeat outlook for performance of investment banking businesses.
Over the past six months, shares of Citigroup have gained 5.5% compared with 10.3% rally of the industry.
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Citigroup (C) CFO Sees Consent Order as a Multi-Year Strategy
At a conference held on Wednesday, Citigroup’s (C - Free Report) CFO Mark Mason said that he looks upon the consent order, issued by federal regulators, as a multi-year strategy that will help transform the lender.
The order was issued in October after the company erroneously transferred $900 million to several lenders of the cosmetics brand, Revlon.
Mason said, “We do expect that we will not only have improvements in the way we run our operations, but be in a better position to compete with other players and in a better position to serve our clients to offer and introduce new and innovative solutions to our clients.”
Notably, management is eyeing this as an opportunity to bolster risk controls and enterprise risk control framework. Also, the process will require Citigroup to digitize some of its operations. It is even expected to make the lender compete better with its peers by enabling it to offer and introduce new and innovative solutions.
Also, Mason mentioned that the company is planning the strategy for 2021 and he already expects costs tied to the transformation investments to be “up a couple percent” next year.
At the conference, Mason separately mentioned that the lending scenario is expected to pick pace in the second half of 2021. Some of the upward pressure in consumer loans is expected from the promotional credit card offerings that Citigroup is expected to introduce in that period. Also, corporate lending is likely to rise with business activities expected to return to normal levels.
On the revenue front, Mason sees a flat trend for 2020, with consumer unit and institutional side of the business continuing to be affected by low rates and reduced levels of activity.
Also, owing to strong markets performance, revenues from trading businesses, fixed income and equities are likely to be up in the mid-teens. On the investment banking side, revenues might decline in low double-digits year over year, due to an exceptionally strong fourth quarter last year.
Conversely, other Wall Street firms including, JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Bank of America (BAC - Free Report) have given upbeat outlook for performance of investment banking businesses.
Over the past six months, shares of Citigroup have gained 5.5% compared with 10.3% rally of the industry.
Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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