Let’s start with the obvious problem: Citigroup’s revenue has fallen over the past five years from $69 billion in 2013 to $64 billion in 2017. Some analysts see some improvement in 2018, but still only low single-digit growth. Compounding the problem, the company’s efficiency ratio fell from 59.3% in Q4 2016 to 58% in Q4 2017. In some ways these problems are the natural result of Citigroup’s having made the wrong long-term bets. Its Citi-Cards, which are tied to major retailers, have been in a general slump for years because retail has been in a slump for years. Also, the company’s huge investments in Mexico, South, and Central America haven’t turned into the El Dorado it was hoping for. Unfortunately for Citigroup, these trends are likely to stay in place for a while, and it could take years for the company to change direction, even if it knew exactly which direction it wanted to go in.
Chart courtesy of www.stockcharts.com