Citigroup Faces Growing Troubles: Could the Industry Be at Risk?

Core Viewpoint - Citigroup's stock has declined over 5% following its latest quarterly earnings report, primarily due to industry-wide credit loss concerns and regulatory speculations rather than its actual revenue performance [1][3][5]. Group 1: Financial Performance - Citigroup reported a $2.7 billion credit loss attributed to its card business, reflecting a broader trend of rising credit losses and delinquency rates across the banking sector [3][4]. - The bank's return on tangible common equity (ROTCE) fell to 7$1.5 billion to over $2.2 billion [6]. Group 2: Market Sentiment and Regulatory Concerns - Analysts are concerned about the potential for Citigroup to face an "asset cap" similar to another bank recently penalized for wrongdoing, which has led to increased scrutiny and speculation [5]. - The stock's price-to-earnings (P/E) ratio stands at 18.5x, which is a significant discount compared to the finance sector's average of 49.5x, indicating expectations of lower growth or prices ahead [7]. - The rise in 90-day delinquencies for Citigroup's cards to 1.5% from 1.3% over the past 12 years raises concerns about the health of U.S. consumers and the broader banking sector [4].