Citigroup Commands Higher Share in International Banking
Global Consumer Banking
US commercial banks’ (IYF) net interest margins have expanded amid rising rates in recent quarters. Lower unemployment and rising equity have helped banks garner higher deposits and improve lending activity. Retail and corporate lending has strengthened due to expansion plans.
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Citigroup’s (C) Global Consumer Banking segment’s revenue grew 6% to $8.4 billion in 4Q17. Excluding the impact of the US dollar, its revenue grew 4%. On a sequential basis, revenue remained flat, helped by 2% growth in international markets. Year-over-year, the bank saw 7% growth in international markets and 2% growth in North America. US banks rely on international markets to expand their lending books when borrowing slows in domestic markets.
Retail loans and credit cards
As of December 31, 2017, Citigroup had retail loans of $145 billion and deposits of $307 billion, representing year-over-year growth of 5% and 2%, respectively. The growth likely reflects Citigroup’s focus on retail lending. In 4Q17, Citigroup’s average card loans rose 6% to $158 billion, and its investment assets under management rose 17%, reflecting a higher demand for wealth management advice.
Global Consumer Banking’s credit costs rose 8% in 4Q17, reflecting a reserve buildup and credit losses. The segment’s net income grew 9% due to revenue growth and lower spending. Global banking will be key for originations, asset management expansion, and investment banking businesses in 2018.