Citi CEO: Costco Credit Win Proof Of Commitment To Rebuilding Reputation

Costco Wholesale Corporation COST's credit card partnership with Citigroup Inc C is more than a year old, but may be underappreciated by investors, according to Citi CEO Michael Corbat.

In fact, when Citi was given exclusive rights to a Costco branded credit card the company itself undermined its true potential, Corbat told Jim Cramer in an interview. The deal is now expected to bring in $10 billion to $11 billion of receivables and new cardholders who combined are expected to spend $100 billion in a single year.

"Costco's a great partner," Corbat said. "It's a great company. And the receptivity of our cardholders and the usage of the cardholders has been great."

But perhaps more important, the credit card deal is part of the company's efforts to restructure itself from a credit perspective, earnings perspective, and business model perspective, the executive explained. By showing improvements across all these segments Citi continues to re-build its reputation and improve its stock price which bottomed near $10 per share during the financial crisis.

"While the stock is nowhere near its all-time highs from before the recession, unlike many of the other banks, its' nevertheless made a stunning comeback," Cramer said. "And it is up 580 percent from its 2009 lows -- and keeps on getting better."

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