Citigroup targeting 9 percent revenue growth
NEW YORK — Citigroup Inc. said Friday it is aiming for 9 percent revenue growth as it looks to rebound from recent struggles tied to deterioration in the mortgage and credit markets.
Citigroup generated $13.22 billion in revenue during the first quarter, 48 percent less than the $25.46 billion it generated during the first three months of 2007.
Citigroup was set to outline current and future operations at the bank as part of an investor day presentation scheduled for Friday morning.
In notes for the presentation, Citigroup said within the next two to three years, it projects revenue growth to be strongest in its transaction services division. Citigroup is targeting 14 percent growth in the division.
Citigroup projects its global cards business would see the smallest revenue growth, at 7 percent.
Citigroup said it is aiming for between 16 percent and 18 percent return on current equity — equity that has been diluted in recent months as the bank has raised billions of dollars through new investments. Citigroup has been forced to raise new capital to offset billions of dollars in losses tied to bad bets in the mortgage and credit markets.
Citigroup lost $14.94 billion during the last two quarters.
Since the middle of 2007, rising delinquencies and defaults among mortgages — especially subprime loans given to customers with poor credit history — led investors to shy away from purchasing all but the safest type of debt.
With almost no appetite for risk, the value of bonds and other debt backed by troubled or risky loans tumbled. That forced banks like Citigroup to slash the value of their holdings by billions of dollars to reflect current market values.
Because of those losses, Citigroup was forced to raise new cash to shore up its capital base.
In November, the Abu Dhabi Investment Authority invested $7.5 billion in Citigroup. In January, the Kuwait Investment Authority and Saudi Arabia's Prince Alwaleed bin Talal were part of a broader $12.5 billion investment in the bank.
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