Explore the intriguing rise and fall of a major U.S. banking institution, from its innovative beginnings to its struggles during the financial crisis. Delve into Citigroup's multifaceted business model that spans banking to global wealth services. Discover current financial trends, including a concerning stock price that has been flat for a year and down over 30% in five years. With an impressive earnings yield of 15% and a dividend yield of 4.39%, could Citigroup be a hidden value play amid its slower revenue growth compared to peers?
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question_answer ANECDOTE
Citibank's Historic Innovations
Citibank was chartered in 1812 and grew to be the largest American bank by 1895.
It pioneered unsecured personal loans and compound interest in the 1920s, and was the first major bank to offer checking accounts in the 1930s.
question_answer ANECDOTE
Failed Merger with Travelers Group
Citicorp merged with Travelers Group in 1998, creating a firm with nearly $700 billion in assets.
The acquisition failed due to poor synergy and cyclical insurance sales, leading to Travelers' spin-off in 2002.
question_answer ANECDOTE
Citigroup and the 2008 Crisis
Citigroup suffered huge losses during the 2007-2008 financial crisis due to bad subprime loans.
The U.S. government bailed Citi out and controlled it for some time until 2010, when Citi returned to profitability.
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Today we'll learn about Citigroup, one of the Big Four American banks. Like its peers, Citi has had a tumultuous history. Is the stock worth the price at current levels?
History of Citigroup [00:02:26] Citigroup's history, from its founding in the early 1800s to its expansion and innovation in the 20th century, to its acquisition of Travelers Group and subsequent spinoff, to its troubles during the financial crisis and eventual return to profitability.
Citi's Business Model [00:04:50] An overview of Citigroup's business model, including its five major markets: banking, personal banking, markets, Citi Global Wealth, and services.
Citigroup's Financials [00:07:00] A summary of Citigroup's financial data over the past several years, including its revenue, net income, dividends, and share repurchases.
Citigroup's stock price performance [00:10:22] Citigroup's stock price has been flat over a year and down over 30% over the past five years. The market is pricing it lower than its peers, but it could be a good stock to own potentially.
Earnings yield and dividend yield of Citigroup [00:11:20] The earnings yield of Citigroup stock is 15%, and the dividend yield is 4.39%, which is higher than average in the market right now.
Is Citigroup a potential value play? [00:12:26] Citigroup could be a potential value play, but it depends on whether you want to own a bank with slower growing revenues compared to its peers.
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