Stock Alert for Citigroup Inc. ($C)

Citigroup Inc. (NYSE: C)

Citigroup Inc. (C) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL) and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc.

The Company was founded in 1812 and is based in New York, New York.

Share Statistics (19-Apr-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	C	Revenue, $Mn	159.2B	105.8B	33.5%	16.3B	11.9B	27.0%
Current price	$4.88	Gross marg.	n/a	n/a	n/a	n/a	n/a	n/a
52wk Range:	$5.43-2.55	Oper. margin	23.5%	18.8%	20.0%	n/a	n/a	n/a
Avg Vol (3m):	548,079,000	Net margin	2.3%	-26.2%	2156%	-105.9%	-63.7%	39.8%
Market Cap.	139.37B
Dil. Shares Outst.	28.6B	EPS, $	0.72	-4.72	755.6%	-4.12	-0.34	91.7%

Source: Reuters.com, SEC Filings.

Financial Summary

Citigroup today reported first quarter 2010 net income of $4.4 billion or $0.15 per diluted share, and revenues of $25.4 billion.

Revenues grew $7.5 billion and net income increased $5.8 billion, excluding the $10.1 billion pre-tax loss from the TARP repayment and exit of the loss-sharing agreement with the U.S. government in the fourth quarter of 2009. Provisions for credit losses and for benefits and claims declined $2.4 billion sequentially to $8.6 billion, the lowest level since the first quarter of 2008. Expenses were down 6% sequentially to $11.5 billion.

Key Items

• Citigroup revenues were $25.4 billion, up $7.5 billion sequentially, excluding the impact of the TARP repayment and exit of the loss-sharing agreement in the fourth quarter of 2009.
• Securities and Banking revenues more than doubled to $8.0 billion from $3.3 billion in the fourth quarter of 2009. Excluding the impact of CVA from both periods⁴, revenues increased $2.5 billion, or 48%, sequentially to $7.7 billion.
• Citigroup expenses decreased $796 million, or 6%, sequentially to $11.5 billion.
• Citigroup net credit losses declined $1.6 billion, or 16%, sequentially to $8.4 billion.
• Citigroup recorded a net release of reserves for loan losses and unfunded lending commitments of $53 million in the first quarter of 2010, versus a $755 million net build in the prior quarter.
• Citigroup’s allowance for loan losses was $48.7 billion or 6.80% of loans, up from $36.0 billion or 6.09% of loans in the fourth quarter of 2009, primarily reflecting the adoption of SFAS 166/167.
• Tier 1 Capital and Tier 1 Common ratios of 11.2% and 9.1%, respectively, increased significantly from the pro forma ratios as of year end 2009, after adjusting for the adoption of SFAS 166/167, which had a negative impact of 140 and 138 basis points, respectively.
• Book Value per share was $5.28, down from $5.35 in the prior quarter. Tangible Book Value⁵ per share was $4.09, down from $4.15 in the prior quarter. The adoption of SFAS 166/167 had a negative impact of $0.29 per share on both Book Value and Tangible Book Value.
• Continued support for U.S. economy and consumers. Since the start of the U.S. housing crisis in 2007, through the first quarter of 2010, Citigroup has helped more than 900,000 homeowners in their effort to avoid potential foreclosure. Citigroup has also been helping nearly 1.7 million credit card members manage their card debt through a variety of forbearance programs.

REVENUES

Citigroup revenues were $25.4 billion, up $17.5 billion from the fourth quarter of 2009. Excluding the $10.1 billion pre-tax loss from the TARP repayment and exit of the loss-sharing agreement in the prior quarter, revenues increased $7.5 billion or 42%. The sequential improvement reflected strong results in Securities and Banking (“S&B”), a positive CVA in the quarter ($289 million in the quarter compared to negative $1.9 billion in the fourth quarter of 2009) and higher positive net revenue marks in the Special Asset Pool (“SAP”).

Citicorp revenues were $18.5 billion, up $4.8 billion or 35% from fourth quarter of 2009, driven by growth in S&B. Citicorp’s North America, EMEA, and Asia regions had double-digit sequential growth in revenues, up 58%, 64%, and 23%, respectively, while the Latin America region had an 8% decline. Excluding the impact of CVA from both periods, Citicorp revenues were up 17% sequentially to $18.2 billion.

Citi Holdings revenues were $6.6 billion, up $1.4 billion, or 26%, from the prior quarter. Revenues in the SAP increased $1.3 billion sequentially to $1.5 billion, driven by higher positive net revenue marks, particularly on sub-prime related direct exposures and the Monoline CVA (see Appendix A). Local Consumer Lending (“LCL”) revenues were $4.7 billion, up slightly from the prior quarter. Brokerage and Asset Management revenues were $340 million, up $69 million or 25%, mainly due to gains on business dispositions.

Corporate/Other revenues were $349 million compared to negative $11.0 billion in the prior quarter, which reflected the $10.1 billion pre-tax loss of the TARP repayment and the exit of the loss-sharing agreement.

NET INCOME

Citigroup’s net income was $4.4 billion compared to a net loss of $7.6 billion in the prior quarter. Excluding the $6.2 billion after-tax loss of the TARP repayment and the exit of the loss-sharing agreement in the fourth quarter of 2009, net income increased $5.8 billion. The sequential growth in net income was due to improved revenues, continued expense discipline, and lower credit costs.

Citicorp net income of $5.1 billion was $3.3 billion higher than the prior quarter, mainly driven by strong results in Securities and Banking, as well as lower credit costs. All four Citicorp regions showed sequential growth, with particular improvement in North America and EMEA.

• Regional Consumer Banking net income of $1.0 billion was up 82% sequentially, driven by Latin America and Asia, reflecting continued improvement in credit trends.
• Securities and Banking net income of $3.2 billion was up $2.9 billion from the prior quarter, with particular strength in North America and EMEA. The net income improvement mainly reflected strong revenue performance, a $1.9 billion pre-tax negative CVA in the prior quarter, continued expense discipline, and a decline in credit costs.
• Transaction Services net income of $936 million was up 3% sequentially, driven by North America and Latin America. Continued expense discipline and lower credit costs more than offset the absence of the NCT gain in the prior quarter.

Citi Holdings reported a net loss of $887 million, compared to a net loss of $2.6 billion in the prior quarter. The sequential improvement was driven by higher positive revenue marks in SAP, and lower credit costs and expenses.

Corporate/Other reported a net loss of $36 million compared to a loss of $7.0 billion in the prior quarter, which reflected the impact of the TARP repayment and exit of the loss-sharing agreement.

Financial Strength (19-Apr-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	–	0.00	4.41	0.81
Current Ratio (MRQ)	–	0.00	8.13	0.97
Long-Term Debt to Equity (MRQ)	238.39	98.48	106.14	152.68
Total Debt to Equity (MRQ)	384.53	349.29	292.02	216.11

Source: Reuters.com, SEC Filings.

Analyst Consensus

Buy

Outperform

Hold

Underperform

Sell

No Opinion

This is the consensus forecast amongst 18 polled investment analysts. Against the Citigroup Inc company.

Analyst Detail	Buy	Outperform	Hold	Underperform	Sell	No Opinion
Latest	5	2	9	1	1	0
4 weeks ago	4	2	10	1	1	0
2 months ago	4	2	9	1	2	0
3 months ago	4	2	8	1	2	1
Last year	1	2	7	2	0	0

The 16 analysts offering 12-month price targets for C have a median target of 4.75, with a high estimate of 6.00 and a low estimate of 3.50. The median estimate represents a 4.17% increase from the last price of 4.56.

Source: www.ft.com

Consensus Estimates Analysis

	# of Estimates	Mean	High	Low	1 Year Ago
SALES (in millions)
Quarter Ending Jun-10	8	20,374.10	23,642.00	18,807.00	–
Quarter Ending Sep-10	8	20,111.80	22,590.00	18,802.00	–
Year Ending Dec-10	13	80,855.80	92,115.00	71,642.00	85,099.60
Year Ending Dec-11	13	84,872.80	94,635.00	74,566.00	90,035.40
EARNINGS (per share)
Quarter Ending Jun-10	14	0.01	0.06	-0.06	–
Quarter Ending Sep-10	14	0.02	0.05	-0.07	–
Year Ending Dec-10	16	0.09	0.21	-0.03	0.30
Year Ending Dec-11	16	0.39	0.55	0.25	0.61
LT Growth Rate (%)	2	1.50	11.00	-8.00	8.00

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=C

Investment Highlights

Citigroup recently announced that Citi® Investor Services, part of the Global Transaction Services business, has launched a new global operating platform specifically for hedge funds. This new offering provides Citigroup’s existing and future hedge fund administration clients a fully integrated infrastructure spanning the complete operating lifecycle of a hedge fund: from receipt of trade to daily operations, calculation of the NAV through the generation of the investor statements. Citigroup’s end-to-end solution will establish standardized applications and processes across each region, ensuring accuracy, transparency and consistency. Furthermore, the global operating platform for hedge funds provides comprehensive support for all investment products, strategies and instruments, and is especially adept at valuating complex securities.

Citigroup offers Hedge Funds a broad set of services including prime finance, custody and middle office support. Furthermore, Citi Prime Finance offers global client service covering the full range of asset classes and a comprehensive suite of execution solutions. The depth of Citigroup’s experience in securities lending, swaps, fixed income repo, futures, foreign exchange and capital introductions makes Prime Finance a chosen and trusted partner.

The global operating platform for hedge funds ensures improved quality controls through expanded data automation, and offers enhanced performance and added functionality, including:

• STP for high volume trade processing
• Industry leading complex pricing
• Bank debt accounting capabilities
• Standardized Web-based reports via CitiDirect®, Citigroup’s award-winning internet based application
• Integration with Citigroup’s Global Custody, Middle Office and Prime Finance platforms
• On- and Off-Shore Investor allocations covering Side pockets, Management fee calculations, capital activity, and Master/feeder structures with dozens of preformatted reports and statement preferences

Through its Securities and Fund Services business, Citigroup’s industry-focused experts provide investors worldwide with tailored solutions delivered though proven global platforms that feature modular, open architecture. With over $12 trillion of assets under custody and the industry’s largest proprietary network, clients can leverage Citigroup’s local market expertise and global reach to extract value across the entire investment value chain.

As part of an effort to meet increasing demand for financing in the region, Citigroup yesterday announced several new appointments to expand its Asia Pacific Acquisition and Loans teams within its Capital Markets Origination (CMO) unit.

Najeeb Haider has joined to take up a key role as managing director in the Acquisition Finance team. Prosenjit Saha has been appointed Director of Loan Syndicate and Sales for South Asia, covering Thailand, Malaysia and India. Cecilia Noronha, has been appointed director of Loan Syndicate and Sales for North Asia. All three are based in Hong Kong.

Najeeb Haider will focus on strengthening and building our C’s Acquisition Finance platform in Asia. Najeeb Haider has been with C since 1995 and has more than 19 years of experience in project and corporate finance, along with a wealth of expertise in credit and structuring. He was previously responsible for infrastructure and energy finance for Asia Pacific.

Prosenjit Saha joined Citi in 2000 and has worked in CMO since 2003. He was recently with the Structured Products group and has led a number of structured and acquisition financings, high yield loan syndications and equity linked transactions. Prosenjit Saha brings to the syndicate platform 15 years of combined experience and an in-depth understanding of debt and equity markets.

Cecilia Noronha will work with the team to expand its loan syndication portfolio covering Korea and China. Cecilia Noronha was previously with BNP Paribas, where she was a Director in the Loan Syndication division. Cecilia has more than 15 years of extensive corporate banking and fund investor coverage experience across loan syndication, relationship management and risk management. Prior to BNP, she was with a number of financial institutions including Bank of America, HSBC and DBS.

C’s Asia Pacific CMO business is one of the fastest growing areas in the bank’s Asia Pacific Global Markets franchise. In the first quarter of 2010, the bank helped clients raise close to US$40 billion in the region, according to Dealogic data.

Source: http://www.citigroup.com/citi/homepage/

Technical Analysis

Source: http://stockcharts.com

C is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

C is trading near its upper Bollinger Band. This suggests that the stock price is high relative to its recent price action.

The MACD for C currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Apr-19-2010	symbol	Share, $	$ Mn	2009	2010	2009	2010
Goldman Sachs Group Inc.	GS	163.32	85.95B	7.50	n/a	1.64	n/a
Wells Fargo & Company	WFC	33.02	171.31B	18.60	n/a	1.90	n/a
JPMorgan Chase & Co.	JPM	45.39	180.44B	17.69	n/a	1.80	n/a
Financial Median			145.90B	14.59	n/a	1.78	n/a
Citigroup Inc.	C	4.88	139.37B	n/a	n/a	1.72	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	0
Sales	1,855	1
Net Shares Purchased (Sold)	(1,855)	1
Total Insider Shares Held	1.16B	n/a
% Net Shares Purchased (Sold)	0.0%	n/a

Net Institutional Purchases – Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	3,755,990,000
% Change in Institutional Shares Held	27.1%

Source: Yahoo Finance

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