10 Best Bank Stocks To Invest In For the Long Term

3. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Investors In Q3 2024: 88

Citigroup Inc. (NYSE:C) is an iconic American bank headquartered in New York City. Another mega player in the US banking industry, the bank depends on consumer spending and health for its hypothesis. Citigroup Inc. (NYSE:C)’s narrative has also struggled in 2024 due to a fine by the currency controller office for deficiencies in risk management. However, the bank benefits from a diversified income statement which is neatly divided across financial markets, services, wealth management, broader banking, and personal banking. For the nine months ending in September, Citigroup Inc. (NYSE:C)’s Services and Markets businesses accounted for 47% of its post-interest expense revenue. These businesses are dependent on a cyclical upswing in the economy that is typically ushered by high interest rates. On a broader note, full-year revenue guidance, share buybacks, and execution of its strategic transformation will drive Citigroup Inc. (NYSE:C)’s hypothesis.

During the Q3 2024 earnings call, Citigroup Inc. (NYSE:C)’s management commented on the impact of consumer spending on its revenue:

“Lower discretionary spending is impacting our retail services portfolio. However, we continue to see lower payment rates contributing to interest earning balances. In retail banking, we are growing our mortgage portfolio as the rate environment shifts, as well as growing overall loans. The US consumer dynamics remain remarkably consistent with prior quarters. Our customers are healthy, but more discerning in their spend with signs of stress isolated to the lower FICOs. We have maintained strong credit discipline and our card portfolios continue to perform very much in line with our expectations. In terms of capital, while uncertainty about the Basel III Endgame prevails, our capital position remains very robust and we ended the quarter with a CET1 ratio of 13.7%.”