Where Will Citigroup Be in 3 Years?

Core Insights - Citigroup has seen a significant stock price increase of over 75% in the last five years, trading at over $88 per share, a level not reached since 2008 [1] - The bank trades at approximately 97% of its tangible book value (TBV), indicating a discount compared to peers, despite growth in TBV per share [2] Transformation Strategy - Under CEO Jane Fraser's leadership since 2021, Citigroup initiated a transformation plan focusing on divesting inefficient international consumer franchises and capitalizing on higher-returning businesses [3] - The divestiture of Banamex, Citigroup's profitable Mexican consumer banking operation, is part of this strategy to free up capital for investment in areas like investment banking and wealth management [3][6] - The transformation aims to enhance returns, with a target of achieving a 10% to 11% return on tangible common equity (ROTCE) by 2026, up from a 6.1% ROTCE in 2024 [8][10] Future Expectations - Citigroup is expected to complete its international divestitures, including the IPO of Banamex, within the next three years [10] - The bank's current TBV per share is about $90, and a stock price of $145 would require a valuation of 1.5 times TBV, which remains below peers [11] - There is potential for Citigroup to consider whole bank acquisitions to enhance its U.S. deposit presence once it achieves a better valuation [12]