Konrad called Citigroup's wind-down of non-core assets "fairly impressive," and said that "since establishing the split between Citicorp and Citi Holdings, the latter has reduced assets from $808 billion to $191 billion currently."
Deployment of excess capital is an important theme for long-term investors in Citigroup. Following the Federal Reserve's annual round of large-bank stress tests during the first quarter of 2013, Konrad expects the company to be approved to raise its quarterly dividend from a penny a share to 25 cents, and also to buy back "approximately $4.5 billion" worth of common shares.
Konrad also likes Citigroup's prospects to take more business from international competitors. "Given the capital constraints and limited flexibility for dollar funding, many European banks have backed away from global finance opportunities, as they have significantly scaled back their trade finance operations. However, for Citi, global payments and trade finance is at the cornerstone of its corporate strategy. As a result, Citi has picked up meaningful market share in this segment, which we expect to continue over the next few years."
Email. Follow @PhilipvanDoorn
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV