Citigroup share price: 4 things to watch for in Q1 results

The US bank has to address four factors before its Q1 earnings report.

Citigroup logo before Citigroup Q1 earnings Source: Bloomberg

Citigroup share price could be influenced by its Q1 results. Citigroup Q1 revenue could be influenced by these four factors.

Will lowered expectations hurt Citigroup’s Q1 results?

The bank’s chief financial officer, Mark Mason, lowered expectations for Citigroup’s Q1 earnings after a mixed Q4 revenue report. Mason offered weak guidance for Citigroup’s Q1 earnings despite the recovery from low earnings in late 2018 because of the volatility on Wall Street.

‘We've started to see markets stabilize and trade higher, but we haven't yet seen a full recovery from a year ago,’ said Mason.

He also noted that earnings may be down by quarter, but expected year-by-year growth.

‘Quarter-over-quarter they're likely to be down, but year-over-year we expect there to be higher revenues, especially in M&A and investment grade debt issuance,’ added Mason.

The lowered guidance for Citigroup’s Q1 earnings could impact the bank’s revenue.

Could digital wallets increase Citigroup’s Q1 revenue?

While Citigroup has weaker-than-expected expectations for its earnings, Citigroup’s Q1 profits could be improved by an electronic wallet that competes with Apple Pay. The bank will offer customers a digital payment system that can be accepted by more merchants.

‘Digital payments are rapidly growing, and there’s a need for bank-grade technology, said Manish Kohli, Citigroup’s global head of payments and receivables.

Kohli added that the payment service is also ‘about giving choice and control to consumers to stay with whatever method of payment they like’.

Kohli also promised that the bank will establish relationships with business owners to make it easier for the bank’s customers to make purchases.

‘We will manage all the relationships,’ said Kohli.

The universally accepted digital wallet for clients could help increase Citigroup’s Q1 earnings.

Could Venezuela affect Citigroup’s Q1 earnings?

Citigroup’s Q1 results could be impacted by its connection to the political turmoil in Venezuela. Last month, the corporation announced it will sell tons of gold the bank received from the Venezuelan central bank as collateral on a $1.6 billion loan.

Venezuela’s bank missed a deadline to pay back the loan, so the bank took possession of the commodity. Citigroup’s Q1 profits could be impacted by a possible $1.5 billion sale of the Venezuelan gold.

Will the Hong Kong banker scandal impact Citigroup’s Q1 profits?

Citigroup’s Q1 revenue could be influenced by a scandal involving Hong Kong. Eleven bankers were disciplined after misconduct allegations. The bank noted the termination of eight of the employees in a statement.

‘A review of Hong Kong-based cash equities execution identified personal conduct that did not meet our standards and we have taken appropriate action,’ said Citigroup.

The bank has a large presence in Asia and this latest debacle could negatively impact Citigroup’s Q1 earnings.

Citigroup’s Q1 revenue report will be one of many investors will watch to see if banks will have a positive earnings season.


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