Shares of financial giant Citigroup Inc. (C) rose over 5% in Thursday's trading after the company said it is poised to return to 'sustained profits'. In a Citigroup conference at the Waldorf Astoria, Citigroup Chief Executive Vikram Pandit said the bank is shedding risky mortgage assets and shifting focus to emerging markets like Latin America and Asia.
In a presentation, Citi said it is well positioned to benefit from faster growing products and geographies. For the long term, the company sees growth in emerging markets, and its strategic implication is to capitalize and expand established emerging markets footprint, and capture increasing cross-border trade and payment flows, globally, and intra- regionally.
The company's strategies over the long term also include lower reliance on wholesale funding, focus consumer strategy on key metropolitan areas and digital distribution, and refocus strategy on clients, not products.
Citi expects industry revenues from emerging markets to grow faster than revenues in developed markets. Emerging markets are likely to represent over 55% of potential revenue growth, the company noted.
In 2009, total industry revenues were $3.2 trillion, comprising $1 trillion in emerging markets and $2.2 trillion in developed markets. Citi expects compound annual growth rate, or CAGR, of 7% in industry revenues by 2012 to $3.2 trillion, and expects 12% industry revenue growth by 2012 in emerging markets, to revenue of $1.4 trillion, compared with 5% revenue growth in developed markets, to $2.5 trillion, in that period.
In 2009, Citi's total revenues were $60 billion, of which 54% of revenues were from developed markets and 46% from emerging markets.
The company noted that the bank's goal is to generate a return on assets of 1.25% to 1.5% in its core businesses. In fiscal 2009, the businesses Citi intends to keep and expand returned 1.15%, generating profits of $14.7 billion. However, Citi reported a net loss of $1.6 billion in the year, partly due to losses at Citi Holdings, the assets it plans to sell or wind down over the next few years.
In managed assets, the company's goal is CAGR of 5%, from last year's assets of $1.38 trillion.
At the end of fiscal 2009, Citicorp had assets of $1.079 trillion and Citi Holdings had assets of $547 billion. The company noted that about $61 billion of assets will be transferred from Citi Holdings to Citicorp in the first quarter of fiscal 2010.
In the presentation, the company noted that in the past two years, it has raised significant new capital, reduced amount and riskiness of assets, cut expenses, improved risk management, added strong leadership, and repaid TARP and exited loss-sharing agreement.
Citi closed Thursday's regular trading session at $4.18, up $0.22 or 5.56%, on a volume of 1.2 billion shares. In the past 52 weeks, shares have been trading between $1.48 and $5.43, an three month average volume of 560.18 million.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.