Core Viewpoint - Citigroup Inc. shares reached a new 52-week high of $88.82, closing at $87.60, with a 35.3% increase over the past year, compared to the industry's 41.2% growth [1][9] Financial Performance - Citigroup passed the Federal Reserve's 2025 stress test, indicating strong capital to absorb significant losses [4] - The company plans to increase its quarterly dividend by 7% to 60 cents per share starting in Q3 2025, pending board approval [5] - Citigroup's current dividend yield is 2.56%, higher than Wells Fargo's 1.94% and Bank of America's 2.14% [6] Capital Management - Citigroup has a $20 billion stock repurchase program, with $1.75 billion in shares bought back in Q1 2025 and a similar target for Q2 [7] - As of March 31, 2025, Citigroup's cash and investments totaled $761 billion, with total debt at $317.5 billion, indicating a strong liquidity position [8] Business Restructuring - The company is simplifying its governance structure, reducing management layers from 13 to eight, and has announced plans to eliminate 20,000 jobs over two years, saving $2-2.5 billion annually by 2026 [10][11] - Citigroup is exiting consumer banking operations in 14 markets, having successfully exited in nine countries, which is expected to free up capital for higher-return segments [12][16] Revenue Growth - Citigroup's net interest income (NII) has a CAGR of 8.4% from 2020 to 2024, with expectations of a 2-3% increase in 2025 [16][17] - The company is expanding its presence in private credit through partnerships, including a $25 billion direct lending initiative with Apollo Global Management [18][19] Estimates and Valuation - Consensus estimates suggest a 3.5% and 3.2% increase in sales for 2025 and 2026, respectively, with earnings expected to rise by 23.2% and 27.6% [20] - Citigroup's current P/E ratio is 10.46x, lower than the industry average of 15.06x, indicating a potentially undervalued stock [22][25] Strategic Outlook - Citigroup's strong capital levels, operational efficiency improvements, and strategic exits position it for long-term growth, despite rising expenses and a complex overhaul plan [26][27]

Core Insights - Bank of America (BAC) plans to increase its quarterly common stock dividend by 7.7% to 28 cents per share starting in the third quarter of 2025 after passing the Federal Reserve's 2025 stress test [1][10] - All 22 banks tested in the stress test passed, with the scenario being less severe than the previous year [1] Financial Performance and Capital Deployment - The stress test modeled a 10% unemployment rate, a 33% drop in home prices, a 30% decline in commercial real estate prices, an 8% contraction in GDP, and a 50% equity market decline, resulting in aggregate simulated losses exceeding $550 billion [2] - BAC's preliminary stress capital buffer (SCB) is expected to improve by 70 basis points to 2.5%, with a CET1 minimum requirement of 10% effective October 1, 2025 [3] - If the Fed's proposed changes to the SCB calculation are adopted, BAC's SCB would be 2.7% and its CET1 minimum requirement would be 10.2% effective January 1, 2026 [3] - As of March 31, 2025, BAC had total debt of $721.9 billion and cash and cash equivalents of $273.6 billion, indicating a strong liquidity position [5] Dividend and Share Repurchase Plans - Following the 2024 stress test, BAC had previously increased its quarterly dividend by 8.3% to 26 cents per share, with a history of dividend increases over the past years [4] - BAC has a share repurchase plan with $14.4 billion remaining as of March 31, 2025, supporting continued capital returns to shareholders [10] Peer Comparison - JPMorgan (JPM) plans to increase its quarterly common stock dividend by 7.1% to $1.50 per share for the third quarter of 2025 and has authorized a $50 billion share repurchase program [6] - Morgan Stanley (MS) will increase its quarterly dividend from 92.5 cents to $1.00 and has reauthorized a multi-year share repurchase program of up to $20 billion [8] Valuation and Earnings Estimates - BAC shares have gained 9.6% year-to-date, compared to the industry's 18% growth [9] - BAC trades at a price-to-tangible book ratio of 1.82, below the industry average of 2.85 [12] - The Zacks Consensus Estimate for BAC's earnings indicates year-over-year growth rates of 11.9% for 2025 and 16.7% for 2026, with slight downward revisions in estimates over the past week [15]

And another catalyst could come after the bell. Leslie Picker has got that story for us. So, what are we talking about there, Leslie.Hey, well, you remember these days after the close today. We're expecting announcements from each of the largest banks about how last week's stress test impacts their capital return plans. The Fed asked the 22 bank study to wait 48 business hours or so after the results to share their dividend and buyback changes with the markets.And given the relative ease of this year's exam ...

The annual stress test is designed to examine whether big banks could survive a hypothetical downturn without government assistance. https://t.co/m9HNE5xQBp ...

Genius Act. We know all the things we're talking about. I think JP morgan's going to be right there.>> All right. For more on the strength in banks, I had a stress test in the start of earnings season. Let's bring in RBC Capital Markets.Co-Head of Global financials Research Gerard Cassidy. Gerard, great to see you. Are you expecting any surprises tomorrow.>> We're really not. I think tomorrow we should all expect is that the banks will all pass and flying colors like they have for a number of years of, you ...