Citi at Barclays Conference Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

rising rate environment wont impact our deposit base

” believe the geographic diversity of our deposit base, with only about 40% in the U.S., mitigates the potential impact of industry deposit outflows due to a rising rate environment in any one geography. In fact, we believe we’re poised for a significant benefit in the event of rising rates, particularly in the short end of the curve. As economic conditions have improved since 2010, we have adjusted our interest rate position progressively to increase our sensitivity to a rising rate environment. ”

Update on 3Q

” I’d like to make a few comments on what we are seeing so far in the third quarter. We continue to expect Consumer revenues to grow modestly this quarter both sequentially and year over year, which should result in our Consumer business generating positive operating leverage. We also continue to expect modest revenue growth in Treasury and Trade Solutions versus last year, with ongoing volume growth outpacing the impact of a low interest rate environment.

In Investment Banking, revenue should improve last year as we see continued momentum in our franchise. But on a sequential basis, revenue should be down on seasonally lower underwriting values. And we currently expect total Fixed Income and Equity Markets revenues to be roughly in line with the third quarter of last year, although actual results will depend on the market environment and our performance in the month of September.”

Very focused on CCAR right now

” as I mentioned before, remain very focused on the CCAR process. I’d have to say that if somebody asked me what are the given priorities of the firm at this current moment, priority one would be CCAR. Priority two would be CCAR, and priority three would be CCAR. So we remain very focused, very much in line with your views as well, I think.”

CCAR is an ongoing test

“CCAR is a year-round process and I think that’s one of the clear messages that we’ve developed over the last several years, quite frankly, as you don’t just start your CCAR preparations in September or October. It is year-round, and it needs to be integrated in the way that you actually run the business. It’s not that you run your business and then there is a separate CCAR process. Everything to do with the qualitative aspects of CCAR has to be ingrained in the way that you monitor and conduct your businesses during the course of the year. And I think that’s something now that is very clear. I think that’s been an evolving learning for the industry, but it’s one now that we clearly understand.”

We’ve shrunk the balance sheet by a lot since the crisis

“We’ve taken out $700 billion of assets from Citi Holdings. Our balance sheet is down roughly 20% – 22% from where it was at the height of the crisis. So there has been a great deal of simplification. We have radically changed our strategy. It’s a much more focused strategy. It is focused on specific targeted customer segments. It is not a strategy as you might have had in the past where it was just to get big. So I think that we’ve done a great deal.”