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NEW YORK (
Citigroup(C - Get Report) CEO Vikram Pandit reiterated the bank is likely to return capital to shareholders through a dividend in 2012.
"We expect to return the North American business to profitability next year," Pandit said at the Citi 2011 Financial Services Conference Wednesday. "We are going through the regulatory process and we hope to have more clarity on that by the end of the year. No one is more impatient than I am in returning capital to you. We need more clarity to be prudent."
Without the direction from regulators Citigroup would act cautiously with its capital, Pandit added. The bank halted its dividend 2009 following the financial crisis.
Rochdale Securitiesanalyst Richard Bove said in a note that the bank has reached a turning point with investors, but is still shy of the capital position that it needs to have to satisfy shareholder expectations of dividend payouts and buybacks.
"[Pandit] argued that the bank had plenty of capital and that it would begin paying dividends in 2012. This latter comment led me to believe that the bank is not yet at the capital position it needs to be," said Bove in his note. "Investors now expect it to do well and are seeking information about timing and magnitude. They no longer expect the company to do poorly."
The CEO added Citi is planning for further growth in emerging markets, particularly within its institutional clients group and global transaction services business. Nearly 45 percent of revenues and net income were in emerging markets in Asia and Latin America, Pandit said.
"We intend to grow our businesses in emerging markets. We are continuing to grow out our investment, equities and banking commodities," Pandit explained.
In addition, Citigroup opened 150 bank branches in 2010, many in emerging markets. Pandit also said that the bank was working on transitioning its retail branches on a single technology platform. "We will invest $3 billion to $4 billion in marketing, technology, and restructuring our business in the U.S."
Bove wrote that the strategy is similar to the one originally implemented by John Reed and that Citi, "appears now to have the funds to pursue this business model once again."
--Written by Maria Woehr in New York.
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