In the middle of 2017, Citigroup hosted an investor day, its first in many years.
Its message was that the restructuring of Citigroup is now over: that it is a simpler, smaller, safer and stronger institution; one that has been increasing revenues faster than costs for some time while also investing in businesses that should materially boost earnings in the years ahead.
The unspoken message was that it should no longer trade at a valuation discount to its peers.
When third-quarter 2017 results rolled round, Citigroup showed continued positive operating leverage, with year-to-date revenues up 3% to $54 billion, operating expenses flat and net income up 7% to $12 billion for the nine months. The bank has been buying back equity, so further boosting returns, with earnings per share up by 13% compared with the first nine months of 2016 and return on tangible common equity of 8.3%, up from 7.8% a year earlier.
The Federal Reserve took a while to accept that Citigroup was excessively capitalized, rejecting its plans to buy back stock in 2014.
“It’s only three years ago [in 2015] that we got CCAR [Comprehensive Capital Analysis and Review] approval to buy back $7.8