- Citigroup 's (NYSE:C) share price has doubled since he took over in 2012, and this year the company was approved for $19B in buybacks and dividends. But now CEO Mike Corbat has new targets to hit.
- One in particular is earnings, and the Street's 2020 EPS estimate of $7.80 suggests something other than full confidence in Citi being able to hit its $9 goal (both Street estimates and Citi's target are likely to rise following the tax bill).
- There's also ROA, ROE, and efficiency ratio, and Citi trails nearly all of its big bank peers on each metric - and often by sizable amounts. Looking at return on equity, Citi is at 7.3% at last check vs. JPMorgan (NYSE:JPM) at 11% (second-worst is Bank of America (NYSE:BAC) at 8.1%). Citi's goal for 2020 is roughly 11%.
- One challenge: The cut in the corporate tax rate is likely to lead to a one-time charge of about $20B, mostly thanks to a write-down in the value of Citi's deferred tax asset. Fortunately, the bank's capital position has swelled enough that this isn't likely to impact capital return plans.
- Source: Bloomberg's Gillian Tan
- Now read: Citigroup: Tax Reform Perspective
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