Citigroup Steers Into Recovery, With Others’ Hands on the Wheel
- 6 years ago
Citigroup Steers Into Recovery, With Others’ Hands on the Wheel
If the tax law had been in effect last year, the 9.6 percent return on tangible common equity Citigroup just reported for the year would have risen above 10 percent — already beating his target for 2018,
and suggesting that Mr. Corbat can be more ambitious.
Mr. Corbat warned last year that the cost of writing down unrecoverable loans was going to rise a little more than expected,
and credit losses on its North American own-brand card business rose 10 percent in the quarter.
The $203 billion lender took a $22 billion charge in the last quarter of 2017 as it wrote down deferred tax assets — credits against future tax bills —
and took a hit for deemed repatriation of overseas earnings.
Citigroup is still a passenger in some important ways — rate setters will decide what happens to the yield on
its $1.8 trillion in assets, while regulators must still sign off on future cash returns to shareholders.
If consumers and small businesses feel richer, as its rival JPMorgan Chase said last week they probably will, a beneficiary
should be a company like Citigroup, which makes roughly one-quarter of its revenue from credit cards.
If the tax law had been in effect last year, the 9.6 percent return on tangible common equity Citigroup just reported for the year would have risen above 10 percent — already beating his target for 2018,
and suggesting that Mr. Corbat can be more ambitious.
Mr. Corbat warned last year that the cost of writing down unrecoverable loans was going to rise a little more than expected,
and credit losses on its North American own-brand card business rose 10 percent in the quarter.
The $203 billion lender took a $22 billion charge in the last quarter of 2017 as it wrote down deferred tax assets — credits against future tax bills —
and took a hit for deemed repatriation of overseas earnings.
Citigroup is still a passenger in some important ways — rate setters will decide what happens to the yield on
its $1.8 trillion in assets, while regulators must still sign off on future cash returns to shareholders.
If consumers and small businesses feel richer, as its rival JPMorgan Chase said last week they probably will, a beneficiary
should be a company like Citigroup, which makes roughly one-quarter of its revenue from credit cards.