3. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Investors: 85
Citigroup Inc. (NYSE:C), the third-biggest U.S. lender, was founded in 1812, is headquartered in New York, and provides financial services and products. Corporate/Other, Institutional Clients Group, and Global Consumer Banking are the segments through which it conducts business.
The US-based company runs both a worldwide commercial banking franchise and a domestic retail banking subsidiary. Services, markets, and banking areas (which were originally grouped under the Institutional Client Group, or ICG) comprise the bank’s commercial operations, which also include large trading, investment banking, international corporate banking, and custody operations. Considering its unmistakable worldwide reach, Citi’s most unique business is its commercial banking segment. The banking company has maintained its position as the bank of choice for international businesses in part because of its extensive global presence.
Citigroup’s complex worldwide operations have made it difficult for the company to keep up with peers, but Citigroup is currently undergoing a strategic realignment. This includes significant actions like splitting up its consumer division in Mexico and putting money back into wealth and commercial banking. The firm may at last become a structurally stronger company.
When compared to other banks, Citi’s solvency, burden, and capitalization are its most crucial factors.
The firm’s shares dropped 2% in Q2 2024 despite the company exceeding analyst forecasts with solid revenue growth in Markets and Investment Banking. The decline was attributed to worries about rising spending and market share. The company also issued a warning, stating that costs for FY 2024 might exceed its estimated range.
Diamond Hill Capital Long-Short Fund stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:
“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”
The Hold rating given by DBS analyst Lim Rui Wen is a reflection of worries about small growth catalysts and restructuring difficulties. However, analysts also considered 2024 a transitional year for Citigroup Inc. (NYSE:C), as the company becomes leaner under CEO Jane Fraser’s turnaround.
The financial company’s short-term performance may be impacted by high investment costs and ongoing regulatory scrutiny, but the company’s strategic exits and efficiency improvements are meant to boost future profitability.
Warren Buffett’s Berkshire Hathaway is the largest shareholder in the company, with 55,244,797 shares worth $3.51 billion.
