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Total Revenue
What Is Big?
1. Institutional Client Groups: $39.7 Bil (56%)
2. Global Consumer Banking: $29.2 Bil (41%)
3. Corporate/Other: $1.7 Bil (3%)
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Total Expected Revenue In 2020 $70.6 Bil
What Has Changed?
From 2017 To 2020E
Institutional Client Groups: $4.1 Bil
+ Global Consumer Banking: -$3.5 Bil
+ Corporate/Other: -$1.4 Bil
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Total Change 2017-2020E: -$0.8 Bil
+ ISRG Revenue In 2017: $71.4 Bil
= Total Revenue In 2020E: $70.6 Bil
Citigroup's Business Model
What Does Citigroup Offer?
Global Consumer Banking: This segment includes Consumer Banking (traditional banking services like deposits, loans etc.) and Citi Cards (Citi-branded credit and debit cards).
Institutional Clients Group: It consists of three subdivisions:
Sales & Trading - deals in sales, trading and structuring of financial market products like bonds, equities, derivative etc.,Advisory & Underwriting - provides financial advisory and capital raising services in debt and equity capital markets,Treasury & Trade Solutions - delivers commercial banking products and services like Cash Management, Trade Finance, Securities and Fund Services (SFS).
Corporate/Other: This primarily represents the Citigroup Corporate operations, which provide a support function to the bank’s other operating divisions.
Who Are The Clients?
Citigroup provides consumer banking, credit cards, investment banking, sales & trading, and treasury and securities services to
Retail ConsumersSmall BusinessesCorporates GovernmentsInstitutional Investors such as pension funds, mutual funds and hedge funds High Net-worth Individuals
What Are The Alternatives?
Citigroup's business model faces stiff challenges and competition from offerings by its global competitors such as:
JPMorganGoldman SachsMorgan StanleyBank of AmericaCapital One (Credit Cards)
Related Analysis
Citigroup Stock (NYSE:C)Citigroup vs. Capital One: A Comparative Analysis Of Credit Card Business[Recovery Watch] Major U.S. Bank Portfolio: Average of 11% 5D Return (vs. -35% YTD Return) - JPMorgan Chase, Goldman Sachs & othersAll Trefis Industrials Company data
Total revenues have increased at an average annual rate of 2% over the last four years, from $69.9 billion in 2016 to $74.3 billion in 2019. However, the revenues are expected to go down in the near term due to coronavirus pandemic and economic uncertainity.
Total Revenue [=A+B+C]
Total Revenues
Comparing Citigroup's Revenue Growth To Its Peers
Revenue Growth C
Revenue Growth GS
Revenue Growth BAC
Revenue Growth JPM
Global Consumer Banking is expected to reduce by 14% to $28.3 billion by 2021, driven by negative growth in both Citi Cards and Consumer Banking.
This segment has contributed more than 45% of total revenues over the last four years. It has grown 4% from $31.8 billion in 2016 to $33 billion in 2019.
However, the current coronavirus crisis coupled with the economic uncertainty will significantly harm the near term growth prospects of the segment
We expect the segment to reduce at an average annual rate of 7% and touch $28.3 billion by 2021.
Global Consumer Banking [=A+B]
Consumer Banking [A]
Citi Cards [B]
Due to the current Crisis, there is a drop in consumer demand as people are refraining from discretionary expenditures. The economic downturn could cause significant losses for businesses and individuals alike, impacting their loan repayment capability. This could result in sizable losses for Citigroup, as it has a substantial loan portfolio of consumer loans and commercial loans.Further, as the economic condition deteriorates, it would become expensive for the bank to attract funding, negatively impacting all its operations.Citi Cards are expected to reduce by 14% from $20.4 billion in 2019 to $17.6 billion in 2021, mainly driven by lower net interest income from outstanding card loans.Revenue for consumer banking would decrease by 15% from $12.5 billion in 2019 to $10.6 billion in 2021. This would be driven by negative growth in net interest income from total consumer banking loans due to lower net interest margin. Further, the division should also suffer due to expected decline in average consumer deposits.
Institutional Client Group revenue would add $1.6 in incremental revenues over 2020-2021
Although the segment revenues have grown by 16% over the last four years --from $33.9 billion in 2016 to $39.3 billion in 2019, we expect the growth rate to slow down over the next two years.
Still, the segment revenues would add $1.6 billion and are expected to touch $40.9 billion by 2021.
Institutional Client Group [=A+B+C]
Advisory & Underwriting Services [A]
Treasury & Securities Services [B]
Sales & Trading [C]
Advisory & underwriting services have grown 21% from $4.3 billion in 2016 to $5.2 billion in 2019, however, we expect it to drop by 27% to $3.8 billion by 2021.As the lower market activity would mean a drop in investment banking as well as capital raising deals – resulting in a decline in advisory & underwriting fees.However, the bank could profit due to its significant presence in the sales & trading business. The company generated around 28% of its revenues from its sales & trading business in 2019. Given the extreme level of volatility in equity & debt markets over recent weeks, the bank is well-positioned to report strong results for its securities trading arm.Citigroup derives majority of its Sales & Trading revenues from FICC (Fixed Income, Currency & Commodity) trading. As a result of this dependence, the segment revenues struggled in the first three quarters of 2019 due to the slump in bond yields coupled with lower consumer activity. However, it was more than offset by significantly higher trading revenues in the fourth quarter.Moving forward, we expect the trading revenues to grow by 16% and cross $24.5 billion by 2021. This would be driven by a 19% growth in FICC trading and 18% jump in equity trading revenues.Further, we expect Treasury & Security revenues to decline by 3% to $12.6 billion by 2021. This would mainly be driven by drop in Assets under Custody (AuC).
Corporate/Other segment doesn't have a significant impact on Citigroup's revenues
We expect the segment revenues to decrease from $2.0 billion in 2019 to $1.5 billion by 2021.
Revenue for Corporate/Other
YOY change in Corporate/Other