Citigroup Will Focus on Expense Control in 2024; Increasing Our Fair Value Estimate

Citigroup has an international commercial banking franchise and a domestically focused retail banking unit. The bank's commercial operations—services, markets, and banking segments (which were previously grouped under Institutional Client Group, or ICG)—has large trading, investment banking, international corporate banking, and custody operations. The commercial banking operation is Citi's most unique business, as its global footprint is hard to replicate. This international presence will help Citigroup remain a bank of choice for cross-border companies. While this global presence offers some advantages, it is expensive and complicated to maintain, and the bank's markets desk also produces low returns. As a result, returns for the commercial banking business have been mixed.