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Citi Boosts Credit Card Unit Despite Weakening U.S. Economy
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Citigroup (C - Free Report) has been strongly promoting zero-interest balance transfers between credit cards from different banks to Citi, per an article by Reuters. The bank offers about 21 interest-free months to customers in exchange for a small fee, whereas its competitors offer up to 15 months for no fee.
Per the payments industry publication, The Nilson Report, Citi is considered the third largest U.S. card issuer. Also, of the overall revenues, card business makes up about one-third share.
Per the article, this facility is considered to be risky by some analysts, especially in scenario when the U.S. economy is showing signs of slowdown. Also, customers using such features are deemed risky as they use such facilities to accumulate more debt.
However, Citi’s executives support their strategy and argue that they have tough underwriting standards in place to safeguard the bank in case of any major loss from adverse situations in the future.
Citi continues to advertise interest free feature on popular personal finance websites and through mailers. All other peers have reduced marketing efforts on this scheme.
Notably, Citi’s card business has witnessed delinquency rates much lower than the industry’s average, per federal data and filings. Also, according to a credit rating firm Experian, 83% of consumers in its U.S. credit card business, excluding its retail partnership cards, have good credit scores of 680.
Citigroup continues to execute growth strategies, such as entering the booming digital consumer payments industry and expanding global market presence, thereby aiming to diversify revenue sources.
Year to date, the stock has gained 26.7%, outperforming 11.6% growth recorded by the industry.
First Business Financial Services (FBIZ - Free Report) has witnessed 3.8% upward estimate revision over the past 30 days. The company’s shares have risen nearly 14% so far this year. At present, it has a Zacks Rank #2 (Buy).
Mackinac Financial Corporation’s shares have rallied 6.8% year to date. The company’s earnings estimates for the ongoing year have moved 1.5% north in the past 60 days. The stock currently carries a Zacks Rank of 2.
Farmers National Banc Corp. (FMNB - Free Report) has witnessed slight upward estimate revision over the past 60 days. The company’s shares have risen nearly 6% so far this year. At present, it has a Zacks Rank #2.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Citi Boosts Credit Card Unit Despite Weakening U.S. Economy
Citigroup (C - Free Report) has been strongly promoting zero-interest balance transfers between credit cards from different banks to Citi, per an article by Reuters. The bank offers about 21 interest-free months to customers in exchange for a small fee, whereas its competitors offer up to 15 months for no fee.
Per the payments industry publication, The Nilson Report, Citi is considered the third largest U.S. card issuer. Also, of the overall revenues, card business makes up about one-third share.
Per the article, this facility is considered to be risky by some analysts, especially in scenario when the U.S. economy is showing signs of slowdown. Also, customers using such features are deemed risky as they use such facilities to accumulate more debt.
However, Citi’s executives support their strategy and argue that they have tough underwriting standards in place to safeguard the bank in case of any major loss from adverse situations in the future.
Citi continues to advertise interest free feature on popular personal finance websites and through mailers. All other peers have reduced marketing efforts on this scheme.
Notably, Citi’s card business has witnessed delinquency rates much lower than the industry’s average, per federal data and filings. Also, according to a credit rating firm Experian, 83% of consumers in its U.S. credit card business, excluding its retail partnership cards, have good credit scores of 680.
Citigroup continues to execute growth strategies, such as entering the booming digital consumer payments industry and expanding global market presence, thereby aiming to diversify revenue sources.
Year to date, the stock has gained 26.7%, outperforming 11.6% growth recorded by the industry.
Currently, Citi carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
First Business Financial Services (FBIZ - Free Report) has witnessed 3.8% upward estimate revision over the past 30 days. The company’s shares have risen nearly 14% so far this year. At present, it has a Zacks Rank #2 (Buy).
Mackinac Financial Corporation’s shares have rallied 6.8% year to date. The company’s earnings estimates for the ongoing year have moved 1.5% north in the past 60 days. The stock currently carries a Zacks Rank of 2.
Farmers National Banc Corp. (FMNB - Free Report) has witnessed slight upward estimate revision over the past 60 days. The company’s shares have risen nearly 6% so far this year. At present, it has a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>