Citigroup stock price forecast 2010
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Earnings reports for the fourth quarter are starting to come in, and some of the results aren’t so good. Last year, most of the major US banks were asking for government bailouts, and now, most of them have repaid the loans. This isn’t really a surpirse, because most of the banks wanted to get rid of the government intrusion that came with the loan. Citigroup is one of the biggest bailout recipients, and it posted a $7.6 billion loss this quarter because of the repayment. That leaves some to wonder if Citigroup made the right decision by repaying so quickly, and whether or not the situation has changed. It’s not all doom and gloom at Citigroup, however. The company’s report showed that losses are diminishing, which is a good sign. Consumer and corporate loans decreased from the third quarter, and credit losses fell by $800 million. That’s the second consecutive quarterly improvement, and it’s also a sign to investors that the credit market is stabilizing. Citigroup believes that its prompt repayment of the government loan gave it more freedom- for example, without governmental oversight, they could pay their executives what they deemed appropriate. Citigroup wanted to get back to (risky?) business, and they felt as if they could not do that with Uncle Sam looking over their shoulder. Citigroup has taken steps to ensure that it will be profitable again; CEO Vikram Pandit said that they had made “enormous progress”. Some other changes included improvements in capital strength, downsizing of the company and a more clear global strategy. The CFO of Citigroup, John Gerspach, said that there are signs that the economy outside the US is recovering. If things continue to go the same way, Citigroup will certainly benefit. | |