CITI Group Financial Performance: An Analytical Report

This report provides a financial analysis of CITI Group, utilizing data from Bloomberg to assess the company's performance. It covers the company's operations, which are divided into Global Consumer Banking Group and Institutional Clients Group, and its presence across North America, Asia, Africa, and Europe. The analysis includes a review of the company's revenue, net income, and cash flows, noting volatility in financial performance due to rising operational costs and digital transformation. The report also highlights Citigroup's strengths, such as effective cost control and stable earnings, and discusses the potential impact of interest rate changes by the Federal Reserve. Tools like comparative income statements, common size income statements, and ratio analysis are employed to evaluate the financial performance over a trend period, with a focus on profitability and financial leverage. The analysis concludes that while the company's financial statements show volatility, the performance in 2018 was comparatively better than in 2017 in terms of profitability and efficiency.

Running head: FINANCIAL ANAYLSIS
Financial Analysis
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL ANALYSIS
Table of Contents
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................2
Question 4..................................................................................................................................3
Question 5..................................................................................................................................4
Question 6..................................................................................................................................5
Question 7..................................................................................................................................5
References..................................................................................................................................6

2FINANCIAL ANALYSIS
Question 1
The company selected for the purpose of the financial analysis is the CITI Group
where the analysis of the company was done by taking the financial data and information
available at the Bloomberg data base.
Question 2
The Citigroup Inc. is a well-diversified company dealing in the financial services
where the company focuses on providing various financial services, products to various
corporates, consumers and government. The operations of the company is spread globally
focusing on North America, Asia, Africa and Europe. The operation of the company is
primarily divided into two segments Global Consumer Banking Group and Institutional
Clients Group. The company was founded in the year 1812 and has a strong employee base
of around 204,000 employees. The company is listed in the New York Stock Exchange with
its ticker symbol with its ticker symbol “C” and the current share price of the company is
around 65.63.
Question 3
Citi Group Incorporation is one of the major players in the banking industry which
has a sound market share and a stable financial position. The financial performance of the
company though has been volatile where in the rising cost of operations and digital
transformation and automation has been the key reason for declining margins of the
company. The banking industry has a tight competition where one or the more bank provides
similar services and in that context the revenue of the company was around $32.3 billion in
the year 2015, which stayed intact to around $32.7 billion in the year 2017. The net income of
the company on the other hand saw a major decline from $17.2 billion in the year 2015 to

3FINANCIAL ANALYSIS
about $15.2 billion in the year 2017. The level of activities in the form of cash flows from
operations for the company has been significantly low in the trend period of 2015-2017.
Figure 1: Financial Status of Citigroup Inc.
(Source: Citigroup Inc, 2019)

4FINANCIAL ANALYSIS
Question 4
Earnings consistently and maintain the margins of the company is something, which
the Citigroup is praised. The performance of the company in maintaining the cost control was
the most effective. In the recent article review conducted by Bloomberg it was stated that the
company had the highest annual efficiency ratio among the major US banks (Bloomberg
Opinion, 2019).
Figure 2: Financial Analysis of Citigroup Inc.
(Source: Bloomberg Opinion, 2019)
Stability in the earnings of the company, strong asset risk profile of the company and
focus on the core operations of the company has been the key reason for up gradation of the
Citigroup Inc. Institutional Asset Quality and strong customer along with strengthening base
of the company in the capital market were some of the factors taken into consideration.

5FINANCIAL ANALYSIS
In the recent article published for Citi Group stated that if the Fed increase the interest
rate by 0.25 basis point then it would be good for big banks to charge higher rate of interest
and increase their net margins which on an overall would be a positive signal for the
company (Duggan, 2018).
Question 5
The tools used in the financial statement analysis of the company are the comparative
income statement, common size income statement and the ratio analysis which are commonly
used for evaluating the financial performance of the company over a trend period of time.
The vertical common size income statement takes all the value of the statement as a
percentage of base year into account. Since the analysis performed is top down the same is
also called as vertical analysis.
On the other hand side the horizontal common size shows the value across different
years as a percentage of base year values in the given base year of a company. Application of
horizontal analysis is done for comparing the financial statement of the company on a year to
year basis. Comparative income statement shows the value of the financial statement in the
percentage form. Ratio analysis on the other hand is also common used technique for
assessing the financial performance of the company.
Question 6
The financial analysis of the company can be done with the help of the ratio analysis
where the profitability of the company has remained volatile for the company. The company
reported a sharp decline of profitability in the year 2017. The high amount of financial
leverage also effected the debt to equity ratio for the company which in turn increase the
financial risk of the company.

6FINANCIAL ANALYSIS
Question 7
The financial statement analysed for the company shows that the company is having a
volatile financial statement with the revenue of the company currently falling in the trend
period 2017. However the performance of the year 2018 was comparatively much better for
the company as compared to 2017 in terms of profitability, financial condition and efficiency
of the company (Annual Report, 2018).

7FINANCIAL ANALYSIS
References
Annual Report. (2018). Retrieved from
https://www.citigroup.com/citi/investor/quarterly/2019/ar18_en.pdf
Bloomberg Opinion. (2019). Retrieved from
https://www.bloomberg.com/opinion/articles/2018-09-19/the-best-thing-going-for-
citigroup-c-it-s-the-worst
Citigroup Inc. (2019). Retrieved from https://www.bloomberg.com/quote/C:US
Duggan, W. (2018). Citigroup Is a Solid Buy After the Fed's Rate Hike. Retrieved from
https://money.usnews.com/investing/stock-market-news/articles/2018-06-14/
citigroup-inc-c-stock
Moody's Investor Services. (2019). Retrieved from https://finance.yahoo.com/news/citigroup-
c-ratings-put-under-142902238.html