Hi YXI friends,

Citi has shown several quarters of strong non-interest revenue growth, while net interest income has largely stalled. Q4 was no exception. The volatility around US Election and Fed’s rate cuts have helped Citi’s results in sales and trading, but it’s also picking up big fees from investment banking, M&A advisory, and Debt Capital Markets.

Overall, Citi is attractively valued, but I expect the share price to run into some near-term resistance before reaching the ultimate top in this cycle.

Let’s dive in!

Table of Contents

• 1. Citi’s Non-Interest Income Continues Growth

• 2. Business Segment Performance

• 3. Profitability Margins

• 4. Share Repurchase Program

• 5. Valuation Appear Attractive

• 6. Technical analysis

• 7. Rating: Equal Weight

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. Citi’s Non-Interest Income Continues Growth

Before we start, I would highlight that my non-interest income calculation is customised for effective peer comparisons across banks. The main difference is that Citigroup includes certain loss items (Impairment losses on investments and other assets) and excludes income items in the non-interest revenue calculation. This is relevant as our growth rate calculations will be different to what Citigroup claims.

Net Interest Income (NII)

Citi’s Net Interest Income in Q4 came in at $13.7 billion, up 3% QoQ but relatively flat YoY. The main drivers in NII were growths in U.S. Personal Banking (USPB) and Wealth Management, although they were offset by declines in Banking and Other segments (more on this below).

Non Interest Income

Citi’s Q4 Non Interest Income rose 16.7% YoY to $5.8 billion. This reflected strong fee momentum across Services, Banking, and Wealth Management. Investment Banking Fees grew by 35% YoY to $951 million, Equities Revenue grew by 34% YoY to $1.1 billion, while TTS Fees grew by 18% YoY to $1.1 billion.

Provision for Credit Losses

Credit Loss Provisions stood at $2.6 billion in Q3, down 3% QoQ and 27% YoY. This is a positive development for the bank. Credit losses are mostly driven by US Personal Banking card portfolios ($2.2 billion).

Quarterly Revenue (Net Interest Income + Non Interest Income)

Q4 2024’s total quarterly revenue came in at $19.6 billion, 4% higher than Q4 2023. (Note this is lower than Citigroup’s own claim of 12% as their 2023 figure included many expense items that we re-categorise into the expenses section.)

2. Business Segment Performance

Claim Your 7-Day Free Access To YXI Premium