Citigroup managed to grow its core businesses broadly in the third quarter. Revenue and profits rose from the year-earlier period despite wobbly capital markets as Chief Executive Vikram Pandit appeared to turn the ship in a new direction. Here are some of the takeaways Wall Street analysts are offering:Mr. Mayo doesn't care for Citi's ATM envelopes either.
Guy Moszkowski, BofA Merrill: The beat appears to be driven by the release of about $1.5 billion in loan loss reserves in the “bad-bank” Citi Holdings unit, driven by the private label credit-cards business and the Special Asset Pool of relatively “toxic” assets. Given that Holdings is seen as the most questionable and worrisome part of Citi, and that assets there continue to be moved off the balance sheet at a good clip, the ability to recapture loss reserves due to declining delinquency/ risk is a good thing.Mike Mayo, CLSA: Citi said not only that it would not issue new equity but that it intends to return capital to shareholders in 2012. We are somewhat surprised by this aggressive position given the uncertainties of new capital rules (which Citi highlights on page 35 of its “earnings review”), the environment, and the disposition of Citi Holdings....MORE
Credit Agricole's Mike Mayo Maintains UNDERPERFORM Rating on Citigroup, Raises Price Target (C)
Credit Agricole's Mike Mayo's Meeting With Citigroup: Non-event (C)
This was a publicity stunt. I'll stick with Rochdale's Dick Bove for actual analysis....