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."
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Written by Philip van Doorn in Jupiter, Fla.