Citigroup Inc. (NYSE:C) Q4 2018 Earnings Conference Call - Final Transcript

Jan 14, 2019 • 10:00 am ET


Citigroup Inc. (NYSE:C) Q4 2018 Earnings Conference Call - Final Transcript


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Michael Corbat

investment banking was impacted by declining equity and debt originations during the quarter. Our accrual businesses which consist of Treasury and Trade Solution, Securities Services, the Private Bank and Corporate Lending continued the very strong performance, up a 11% for the full year in constant dollars. And as a matter of fact, we've now had five straight years of consecutive growth in GTS and are confident that we can continue with that momentum.

In Global Consumer Banking, in the US, we saw 4% underlying growth in Branded Cards and 6% revenue growth in retail services this quarter and retail banking grew 5% ex mortgages.

Internationally, we saw good growth in Mexico, especially in the cards products, while Asia was impacted by lower revenues from investment products. During the year, we returned $18.4 billion in capital to our shareholders, buybacks of common stock reduced the shares outstanding by over 200 million shares from a year ago or 8%, and our tangible book value per share increased by 6%. We finished the year with a common equity Tier 1 ratio of 11.9%, up from 11.7% in the third quarter as risk weighted assets declined. We'll be making our CCAR submission in the spring and believe we've got the capacity to reach our three year capital return target of $60 billion.

As 2019 begins, we find ourselves operating in a more uncertain macro environment. From what we see economic growth is stronger and more resilient than recent market volatility would indicate, that said, we're prepared to make adjustments if we get the sensed economic conditions are changing. We remain committed to our 2020 financial targets and this year we've targeted increasing our return on tangible common equity to 12% and further improving our efficiency ratio. We continue to utilize technology to improve the client experience and lower our cost to serve, whether it's by automating processes or enhancing our mobile channels, and we'll continue to roll out new digital capabilities throughout the year. As I mentioned before, we have levers we can pull up revenues come in lower, but we're very cognizant of the need to invest for the long term so that we can serve our clients with distinction.

One thing before we go to Q&A, I want to take a minute on the occasion of his final earnings call to thank John for his 28 years of service to the firm and to congratulate him on his retirement. I know those on the phone respect him for his candor and honesty, and we'll miss him. He leaves things in good hands with Mark Mason, and I know everybody's going to enjoy working with Mark.

With that, John will go through our presentation and then we'll be happy to answer your questions. John?

John Gerspach

Thank you very much, Mike. Good morning, everyone. Starting on slide three, first, let me note that all comparisons throughout this presentation exclude the one-time impact of tax reform in the fourth quarter of 2017, as well as a