Author Topic: C - Citibank  (Read 130907 times)

John Hjorth

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Re: C - Citibank
« Reply #500 on: June 28, 2017, 02:10:55 PM »
Wow! Much capital return at C is much larger than hoped for:

"The planned capital actions include an increase of Citi’s quarterly common stock dividend to $0.32 per share (subject to quarterly approval by Citi’s Board of Directors), as well as a common stock repurchase program of up to $15.6 billion during the four quarters starting in the third quarter of 2017. These planned capital actions total $18.9 billion over the next four quarters."

https://finance.yahoo.com/news/citi-announces-2017-planned-capital-203800096.html

Simply put, just friggin' awesome!

- Thank you soo much for sharing your line of thinking here on CoBF, Viking. You have made my day.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai


racemize

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Re: C - Citibank
« Reply #501 on: June 28, 2017, 02:30:59 PM »
solid results across the board.  9% buyback, 2% yield. 

Viking

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Re: C - Citibank
« Reply #502 on: June 28, 2017, 02:50:13 PM »
John, one of the big challenges with investing is timing... especially when dealing with the government. The C 'story' is pretty straight forward. However, the timing  of when the various pieces will happen (and benefit shareholders) is impossible to predict. We are lucky to have such a large amount approved for return to shareholders this year. :-)

There are many great 'layers' to the approval today for C:
1.) dividend of $0.32 (2% yield) is finally large enough to appeal to income investors. Income investors also know that dividend will be increasing materially each of the next few years. At $0.32 The payout ratio is only about 24% and C will move this to 30% in the coming years. This opens C up to a whole new group of potential investors.
2.) share buybacks = $15.6 billion will allow C to repurchase 8.5% of outstanding shares. My guess is the purchases will be front end loaded (like last year) so we could see 1% of shares outstanding repurchased each month for the rest of 2017 starting in July.
3.) C management credibility: management has stated they need to do a number of things to unlock excess capital and return it to shareholders; I think this is only the start of C returning excess capital to shareholders
4.) ROTCE target: during their upcoming investor day C will now be updating the path to get to more acceptable industry return ratios.
5.) consumer bank: C management is also telegraphing that returns will be improving in 2H '17 in its consumer business (via investments made in credit cards the past two years); this sets the table for solid top and bottom line growth.
6.) size of CCAR awards may indicate regulators under a Trump presidency are going to ease interpretation of regulations in bank friendly way. More good news likely to come over the next year.
7.) next year there is a good chance we could see a larger CCAR award as C grows total earnings and continues to return excess capital.

I have said this many times... I do not think most investors understand the number and size of tailwinds that are behind the big US banks today. They are going to be the gift that keeps on giving the next couple of years :-)
« Last Edit: June 28, 2017, 03:27:37 PM by Viking »

racemize

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Re: C - Citibank
« Reply #503 on: June 28, 2017, 03:22:35 PM »
I have said this many times... I do not think most investors understand the number and size of tailwinds that are behind the big US banks today. They are going to be the gift that keeps on giving the next couple of years :-)

We need it, after suffering through the slowness of the last few years.  Glad to have the wind at our backs finally.

John Hjorth

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Re: C - Citibank
« Reply #504 on: June 28, 2017, 05:05:25 PM »
Why your Gusy think C has better potential than BAC or WFC? During last days BAC and WFC were at the top of the big banks, concerning price-increase.

My main reason to be in BAC and WFC is that BRK is behind it. And they were extremly cheap in past.

I'm sorry for the late reply here, Valuehalla.

I'm positioned exactly like you, I think, with regard to BAC and WFC.

Being invested in C is to me right now another  case.

If you want some kind of elaboration, please just post.
« Last Edit: June 28, 2017, 05:11:22 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

John Hjorth

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Re: C - Citibank
« Reply #505 on: June 28, 2017, 05:29:30 PM »
John, one of the big challenges with investing is timing... especially when dealing with the government. The C 'story' is pretty straight forward. However, the timing  of when the various pieces will happen (and benefit shareholders) is impossible to predict. We are lucky to have such a large amount approved for return to shareholders this year. :-)

There are many great 'layers' to the approval today for C:
1.) dividend of $0.32 (2% yield) is finally large enough to appeal to income investors. Income investors also know that dividend will be increasing materially each of the next few years. At $0.32 The payout ratio is only about 24% and C will move this to 30% in the coming years. This opens C up to a whole new group of potential investors.
2.) share buybacks = $15.6 billion will allow C to repurchase 8.5% of outstanding shares. My guess is the purchases will be front end loaded (like last year) so we could see 1% of shares outstanding repurchased each month for the rest of 2017 starting in July.
3.) C management credibility: management has stated they need to do a number of things to unlock excess capital and return it to shareholders; I think this is only the start of C returning excess capital to shareholders
4.) ROTCE target: during their upcoming investor day C will now be updating the path to get to more acceptable industry return ratios.
5.) consumer bank: C management is also telegraphing that returns will be improving in 2H '17 in its consumer business (via investments made in credit cards the past two years); this sets the table for solid top and bottom line growth.
6.) size of CCAR awards may indicate regulators under a Trump presidency are going to ease interpretation of regulations in bank friendly way. More good news likely to come over the next year.
7.) next year there is a good chance we could see a larger CCAR award as C grows total earnings and continues to return excess capital.

I have said this many times... I do not think most investors understand the number and size of tailwinds that are behind the big US banks today. They are going to be the gift that keeps on giving the next couple of years :-)

Let's see how this play out going forward, Viking. : - )

We can be geniuses, or idiots - in totally clear hindsight, afterwards.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

Valuehalla

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Re: C - Citibank
« Reply #506 on: June 29, 2017, 08:49:38 AM »
Well done Viking! Thx for sharing your knowledge and opinion here  :)
BRK FFH MKL LVLT CTL BAC WFC BMY MRK MCD MO PM

John Hjorth

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Re: C - Citibank
« Reply #507 on: June 29, 2017, 11:36:02 AM »
I still think this video emulates fairly well C management in talk with Fed and regulators in the spring of '09.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai


John Hjorth

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”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai