Citigroup EPS expected to be worse

Citigroup continues to struggle and looks set to post weaker figures than from 12 months ago.

Citibank logo
Source: Bloomberg

Ahead of next week’s second-quarter figures, the markets are expecting Citigroup to announce its earnings per share (EPS) will be down by 14% year-on-year. Considering the general consensus that the company’s pretax profit is expected to be $4.879 billion, some 22% down from the equivalent 2013 figures, the shares have performed relatively well.

No bank has been unaffected by the changes in regulations governing cash debt ratios, and almost all have found themselves being fiscally punished for historical transgressions. Citigroup is not the exception to that rule, as it is currently facing a $7 billion fine for the mis-selling of mortgage products prior to the financial crisis.

In a similar template to many of its global competitors, Citigroup has also embarked on aggressive asset stripping over the last few years, selling off holdings in the Housing Development Finance Corporation, Akbank, EMI music and Pershing Square Capital Management.

The Citigroup shares price found itself stuck in a range between $46 and $50 for almost all of the last six months, and with the results and a possible sizeable fine looming there is every chance we will see the lower end of this range tested again.  

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.