Bove: Citigroup Has a Lock on Global Banking

Sunday, 09 Jun 2013 09:56 PM

By John Morgan

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Once-teetering Citigroup has a new vitality and a big advantage because it still does
business in more than 100 countries around the world, according to Dick Bove, financial-services sector analyst at Rafferty Capital Markets.

Citigroup has promised to cut costs for the past 30 years, and appears finally to be doing it under the current leadership of CEO Michael Corbat and Chairman Michael O’Neill, Bove said.

But the bank’s far-flung global operations may be its crowning competitive advantage.

Robbed: Secret ‘Financial War’ Will Wipe Out Your Wealth, Warns Pentagon Adviser

“Citigroup has a lock on one of the best franchises in the business,” Bove told Yahoo Breakout. “There is no other bank in the world which is in over 100 countries. If you’re a large corporate corporation and you do business all over the world, Citigroup is your bank.”

Bove is not alone in taking note of Citibank’s resurgence – its shares have doubled in the past year, rising to over $50 from $25.

However, Bove does see one flaw in the Citigroup aura.

“I don’t like its consumer strategy because it doesn’t have one,” he told Yahoo. “This company has so brutalized the consumer business that, personally, I wish they weren’t in it.”

Bove said that while he is bullish on Citigroup, he still likes Bank of America best among the big bank stocks.

Motley Fool said its analysis of Citigroup’s first quarter 2013 results showed $3.8 billion in profit on $20.5 billion in revenue, for a profit margin of 18.5%.

However, JPMorgan Chase did better, with a $6.5 billion profit on revenue of $25.8 billion for a profit margin of 25.2 percent, and so did Wells Fargo, with a $5.2 billion profit on revenue of 21.3 billion for a profit margin of 24.4 percent.

“It's clear to see which banks are the leanest and meanest here: the banks that are making the most out of what they take in. At least Citi didn't come in last,” Motley Fool said.

Because of a government bailout, the "steady-if-uninspired hand at the wheel in the person of former CEO Vikram Pandit" and safer lending practices, "Citi has cleaned up the majority of the mess and is at the very least now solidly profitable (if trending in the wrong direction)," Motley Fool concluded.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved