C - Citibank

[PlanMaestro]

Now I understand why C is not disclosing the carrying value for MSSB unit on their FS. I was looking for this value and there have been direct questions on conf calls and response has been that they wont answer that question. I thought it is weird.

 

Vinod

 

There is a negotiation going on with Morgan Stanley. So it is the same reason as why Bank of America does not disclose reserves for most of its litigations. Also, not sure how much to believe though.

 

Valued at $20 billion on Citigroup's books by the reckoning of Howard Chen of Credit Suisse

[PlanMaestro]

Citi Sells Stake in HDFC

http://online.wsj.com/article/SB10001424052970203918304577242280745108906.html

 

MUMBAI -- Citigroup sold its entire stake in Indian mortgage lender Housing Development Finance Corp. for $1.9 billion that will likely help the US banking giant improve its capital to meet strict international rules.

 

The New York-based bank sold 145.3 million shares, or HDFC's 9.85% stake, through block deals at 657.56 rupees a share, or 6.1% below the stock's closing price Thursday. The sale is expected to result in a gain of $1.1 billion before tax and about $722 million after tax, Citigroup said in a statement.

[alertmeipp]

Some of these stakes worth a lot less just a few quarters back. When the risk appetite is back, both BAC/C will get benefit the most. More ppl will be willing to take some risk on their balance sheet while they offload them to build capital.

[finetrader]

HDFC (HDB-N) is a company I would like to own at the right price as I think that they have the potential to grow their earnings significantly in the years to come.

[PlanMaestro]

Citi, Pandit, and its hedge funds.

 

http://www.bloomberg.com/news/2012-02-29/pandit-fast-money-with-hedge-funds-proves-citigroup-dead-end-with-spinoffs.html

[Grenville]

Citi, Pandit, and its hedge funds.

 

http://www.bloomberg.com/news/2012-02-29/pandit-fast-money-with-hedge-funds-proves-citigroup-dead-end-with-spinoffs.html

 

Nice article. Covers a lot of ground and gives some history on Pandit. thanks.

[biaggio]

just removed my post here-I intended it to be in nat gas article thread-I don t know how it got here in C thread.

 

Sorry

[PlanMaestro]

Smith Barney, Morgan Stanley and Citibank. Summary? MS and C are negotiating on the WSJ.

 

http://online.wsj.com/article/SB10001424052702303816504577305981736738426.html

http://blogs.wsj.com/deals/2012/03/08/morgan-stanley-citi-somewhere-between-checkmate-stalemate-over-smith-barney/

 

 

[PlanMaestro]

No comments on the results? 1.07% ROA pre-CVS and expenses under control is not bad at all.

[PlanMaestro]

CFO makes gaffe on Smith Barney

http://www.nypost.com/p/news/business/citi_slicker_tips_hand_Sqd7l11q0xocE8CswGIBJI

[PlanMaestro]

http://online.wsj.com/article/SB10001424052702304818404577348063867147218.html

 

The bank also disclosed for the first time an estimate of its Tier 1 common ratio under new Basel III capital rules, pegging it at 7.2%. While Citi said this should be above 8% by year's end, the gap between the ratio on the old and new rules is wide. The more than five percentage-point difference compares with about two percentage points at J.P. Morgan Chase and Wells Fargo WFC +1.37% .

 

Part of that is because Citi still has sizable holdings in other financial companies, which are excluded from capital under the new rules. The bank's still-huge deferred-tax-asset, at about $52 billion, also acts as a drag.

 

And that asset may be continuing to weigh on Citi's valuation. The stock trades at about 70% of tangible book value. Exclude the deferred-tax asset, and the stock trades at about tangible book. Unfortunately, though, Citi's improved first-quarter performance didn't put a dent in that asset. Finance chief John Gerspach said it actually increased by about $400 million.

 

[twacowfca]

http://online.wsj.com/article/SB10001424052702304818404577348063867147218.html

 

The bank also disclosed for the first time an estimate of its Tier 1 common ratio under new Basel III capital rules, pegging it at 7.2%. While Citi said this should be above 8% by year's end, the gap between the ratio on the old and new rules is wide. The more than five percentage-point difference compares with about two percentage points at J.P. Morgan Chase and Wells Fargo WFC +1.37% .

 

Part of that is because Citi still has sizable holdings in other financial companies, which are excluded from capital under the new rules. The bank's still-huge deferred-tax-asset, at about $52 billion, also acts as a drag.

 

And that asset may be continuing to weigh on Citi's valuation. The stock trades at about 70% of tangible book value. Exclude the deferred-tax asset, and the stock trades at about tangible book. Unfortunately, though, Citi's improved first-quarter performance didn't put a dent in that asset. Finance chief John Gerspach said it actually increased by about $400 million.

 

Does anyone know what percentage of tangible book value BAC would trade at if their deferred tax asset were excluded from that computation?

[finetrader]

According to this article DTA for BofA is around 30B$. Could not find the original source.

 

 

http://www.economist.com/node/21541431

 

 

[Rabbitisrich]

The tangible bv per share from 4Q11 of $12.95 excludes NET dta but includes msr. The 2011 AR talks about balance sheet effects on page 246.

 

Keep in mind that BAC reports Tier 1 common on a fully phased in basis. All carryforwards are excluded and qualifying net dta, msr, and investment interests can only amount to 15% of Tier 1 common (and they also receive a 2.5x risk weighting (I think!)).

[BargainValueHunter]

If you had to pick between BAC and C for a fresh investment at this point after the run up, which one would you choose.

[txlaw]

If you had to pick between BAC and C for a fresh investment at this point after the run up, which one would you choose.

 

BAC

[racemize]

compensation package denied!

 

http://dealbook.nytimes.com/2012/04/17/citigroup-shareholders-reject-executive-pay-plan/

[ERICOPOLY]

I read that Pandit pocketed $165 million when he sold his hedge fund to Citigroup.  Why not just go back to that business and join the higher paid people who are now complaining about his pay?

 

[yitech]

Citi's $8 Billion Rejection

Bank's Capital Plan, Denied by the Fed in March, Was Bigger Than Expected

 

http://online.wsj.com/article/SB10001424052702304331204577356192509771340.html?mod=WSJ_hp_LEFTWhatsNewsCollection

[PlanMaestro]

http://www.ft.com/intl/cms/s/0/943a2032-8fa8-11e1-98b1-00144feab49a.html#axzz1tLIoRdBW

 

RBS’ plans come almost a year after Citigroup in the US also completed a 10 for one share swap, transforming the price from $4.50 into $45.

....

 

Citi’s rationale was to normalise the group’s share count relative to peers, and to attract a broader group of investors. It thought, too, a higher stock price would reduce transaction costs for both institutional and retail investors and reduce high-frequency trading and volatility.

 

Observers agreed that cutting the number of shares would cut trading volumes back to more normal market levels. A year ago, the American bank’s share of total US trading volumes was about 6 per cent. By July, stock market analysts noted that daily trading volumes in Citi shares, particularly big trades “off exchange”, had fallen sharply.

[fenris]

BB&T CEO thinks Citi will no longer exist in 5-10 years.

BBT_-_Banks.pdf

[PlanMaestro]

Vikram Pandit at Stanford

[treasurehunt]

Vikram Pandit at Stanford

 

Thanks for the link, PlanMaestro. I thought this was a very good interview of Pandit. It's the first time I have been really impressed by the guy.

 

Anybody buying C stock now that it's at just over 50% of tangible book?

[txlaw]

Vikram Pandit at Stanford

 

Thanks for the link, PlanMaestro. I thought this was a very good interview of Pandit. It's the first time I have been really impressed by the guy.

 

Anybody buying C stock now that it's at just over 50% of tangible book?

 

I agree -- that was a great interview.  The last one I saw of him left me a little wary of the guy, but he was quite good in this one.

 

I'm sticking to BAC exclusively for now when it comes to the big banks, but I'll be watching C.

[PlanMaestro]

http://seekingalpha.com/news-article/2969771-citigroup-completes-sale-of-10-1-equity-interest-in-akbank-t-a-s?source=email_portfolio&ifp=0

 

Citigroup Inc. today announced it has sold 404 million common shares in Akbank T.A.S. through an equity offering representing 10.1 percent of the equity interest in the company for TRY5.24 per share. Total proceeds from the transaction are expected to be approximately USD1.15 billion at the current exchange rate, resulting in an after-tax loss of approximately USD243 million in the second quarter. The transaction is estimated to generate approximately 23 basis points of Tier 1 Common capital under Basel III.

 

On April 30, 2012, Citi entered into an agreement with H.Ö. Sabanc1 Holding A.^. (Sabanc1 Holding) and Akbank under which Citi committed to hold the balance of its strategic stake in Akbank, approximately 9.9% of Akbank common shares, for a three year lock-up period following such sale, subject to limited exceptions, and Sabanc1 Holding agreed to waive its right of first offer in relation to the sale of Citis 10.1 percent stake.