Citigroup Is Cheap As Chips; Still A Strategic Shift Can Unlock Massive Shareholder Value (NYSE:C)

The COVID-19 crisis has been the great accelerator in many areas.

This unprecedented crisis has also exposed Citigroup’s (C) strategic vulnerabilities inherent in its business model. Putting it simply, running an emerging-markets global consumer bank under the umbrella of a globally-systemic bank in hindsight is completely sub-optimal (if not insane!).

Selling the Asian and Mexico consumer franchises is extremely accretive for shareholders, and in this article, I will explain why.

Citi will probably do just fine once the economy normalises and will likely trade above tangible book once again, so I would certainly buy the stock at current valuations. Nonetheless, a strategic rethink can unlock massive shareholder value and turbo-charge returns. This is the opportunity presenting itself to Citi’s new management team and one that investors should pay close attention to.

Revisiting the Corbat’s Strategy

Citi’s CEO strategy was aimed at delivering a mid-teens return on tangible equity (RoTCE). It

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