Citigroup (C) Services Investor Day 2024 summary

Strategic vision and business transformation

• Focused strategy to be the leading banking partner for institutions with cross-border needs, a global leader in wealth, and a valued personal bank in the U.S., moving away from the previous financial supermarket model.

• Transformation efforts emphasize simplification, technology modernization, talent, and a culture of accountability, with 2024 marked as an inflection year toward medium-term targets by 2026.

• Rebuilt around five interconnected businesses: Services, Markets, Banking, Wealth, and U.S. Personal Banking, with exits from non-core consumer businesses outside the U.S.

• Progress includes organizational simplification, divestitures, enhanced risk management, automation, and cloud adoption to reduce manual processes and legacy systems.

• Transformation investments are expected to unlock value, improve efficiency, and strengthen regulatory and risk controls.

Financial performance and guidance

• Achieved over $18 billion in Services revenue in 2023, with a 20% annual growth rate since 2021 and pre-tax earnings up 18% annually.

• Total revenues grew from $71.9B in 2021 to $78.5B in 2023, with a 4-5% CAGR targeted through 2026 and 2024 revenue guidance of $80-81B.

• Expenses increased due to critical investments, reaching $56.4B in 2023, but are expected to trend lower to $51-53B by 2026 as simplification and stranded cost reductions take effect.

• Medium-term ROTCE target is 11-12% by 2026, up from 4.9% in 2023, with Services expected to deliver mid-20s ROTCE.

• Capital optimization remains a priority, with improved CET1 capital ratio and RWA efficiency despite higher regulatory requirements.

Services business highlights and growth drivers

• Services combines Treasury and Trade Solutions (TTS) and Securities Services, serving 19,000 clients globally, including 85% of the Fortune 500, and moving nearly $5 trillion daily.

• Market leader in institutional liquidity, payments, trade, and direct custody and clearing, with a 10% wallet share in TTS and 8.9% in Securities Services.

• Payments, Liquidity Management, and Trade & Working Capital Solutions are driving innovation, digitalization, and real-time capabilities, supporting sticky deposits and stable growth.

• Securities Services has grown AUC/AUA by 13% YoY, closing the gap to top peers, and is investing in platform modernization and data capabilities.

• Strategic priorities include deepening institutional and commercial client relationships, expanding e-commerce solutions, and leveraging data and digital platforms for client insights and operational efficiency.