What's The Street Saying About Citigroup?

Barclays’ Jason M. Goldberg maintained an Overweight rating on Citigroup Inc C, with a price target of $65, while Credit Suisse’s Susan Roth Katzke reiterated an Outperform rating and a price target of $57.

Barclays

Citigroup received a subpoena from the US Attorney from its investigation of alleged corruption with FIFA. The company is now subject to regulatory investigation related to its student loan servicing practices. RPL in excess of accruals came in at $3.5bn, down from $4.0bn in 3Q.

Citigroup’s NIM in 2016 will reflect the OneMain sale, offset to some extent by debt repurchase benefits from the previous year, analyst Jason Goldberg said. Citigroup expects NIM to decline in the first half of 2016, and has projected an FX loss of $172mn in 1Q16 on account of changes to Venezuelan's currency controls.

Citigroup’s purchase of Costco Wholesale Corporation COST portfolio is expected to close in mid-2016. Card payment rates in Mexico is likely to remain elevated in 2016. “Asia GCB investment sales could be challenged in 2016. Spread compression and regulatory changes in Asia continue to negatively impact revenues in the near term,” Goldberg wrote.

Citigroup intends to sell its consumer businesses in Argentina, Brazil and Colombia.

Credit Suisse

Decelerating global GDP growth and weakness in capital markets are expected to exert pressure on Citigroup’s revenue. “With respect to trading and capital markets, guidance is consistent with peers with the exception, for Citi, of an approximated $172mn foreign currency loss in 1Q16 alongside Venezuelan currency exchange controls,” analyst Susan Roth Katzke mentioned.

Business units sold by Citigroup in 4Q15, namely OneMain, Japan retail banking and credit cards, generated pretax earnings of $0.6bn in 2015. Citigroup intends to move its consumer businesses in Argentina, Brazil and Colombia to Citi Holdings in 1Q16. These three businesses contributed revenue of ~$1.1bn, expenses of $0.9bn and a net loss of $34mn in 2015.

Energy and related exposures accounted for 89 percent of y/y increase in nonaccrual loans, while consumer credit trends continue to be stable and favorable, Katzke said.