By David Henry and Noor Zainab Hussain
NEW YORK (Reuters) -Citigroup Inc set new profitability targets on Wednesday, aiming for a medium-term return on equity of 11% to 12%, an improvement from recent result.
Analysts had been looking for a medium-term return on tangible capital equity (RoTCE) goal of 12% along with details on how it can be achieved. The metric measures how well a bank uses shareholder money to produce profit.
The bank said it expects expenses to rise between 5% and 6% in 2022, excluding the impact of divestitures.
It added that its priority was to return capital while building to about 12% of Common Equity Tier 1 ratio.
In premarket trading, Citigroup shares were down 0.5% shortly after the presentation was posted.
Citi executives disclosed the target at the bank’s first “investor day” in five years, an event which analysts say could determine its future.
The Ukraine crisis and disruptions from the pandemic are adding to Chief Executive Jane Fraser’s challenge of winning over skeptical investors who have been exhausted by years of turnaround plans falling short.
Citigroup said on Monday its total exposure to Russia amounted to nearly $10 billion, far higher than previously communicated. The new number took into account cash held at the Bank of Russia and other financial institutions, overnight loans and additional exposures to Russian counterparties.
On the same day, Fraser, who became CEO one year ago, had to switch the investor day event from being held in-person to virtual after her two top executives tested positive for COVID-19.
(Reporting by David Henry in New York and Noor Zainab Hussain and Niket Nishant in Bangalore; Editing by Sriraj Kalluvila)
