Citigroup Inc (NYSE:C) wowed investors and Wall Street this morning with impressive earnings. And while the company’s estimate-beating earnings may be enough for some investors to feel confident, others may find more evidence of the bank’s strength by listening to its earnings call with analysts. Now, this morning’s call was an hour and a half long, so to save you some time, here are the top three quotes from the call and how you should be looking at Citigroup Inc (NYSE:C) going forward.
No 1: “We’re sure to be tested as we go through the year”
Though the bank reported solid growth and plenty of progress, CEO Michael Corbat wanted to make sure that one thing was clear — this is not a healthy environment for growth, and things will not be easy. Since Citi has the largest international presence of the big four banks in the U.S., it’s more difficult to project growth when differing economies pose various challenges. Corbat noted that economic growth is uneven around the globe, with emerging markets growing at a near 5% pace and established countries closer to 1%. With the continued volatility in the U.S. and international markets, there are sure to be ups and downs ahead.
With other banks looking to expand internationally, Citigroup Inc (NYSE:C) is a good bank to monitor for potential headwinds. This morning’s news that Chinese economic growth has continued to slow will not be helpful for banks like JPMorgan Chase & Co. (NYSE:JPM), which just invested millions in improving its branch networks in China.
No. 2: “The legal community is creative”
Prompted to speak on the possibility of legal troubles fading to the background, Corbat noted that it is entirely possible for more legal trouble to rear its head even when it seems improbable. Stating that he didn’t think that lawyers have statutes of limitations, he expressed a calm resignation that even if you think something is behind you, that there are ways for lawyers to produce more opportunities.
This may be the same attitude held by leaders of Bank of America Corp (NYSE:BAC), which continues to be pummeled by a barrage of lawsuits. Since the rate of foreclosures is now on the rise again (with Bank of America Corp (NYSE:BAC) holding the most), it’s likely that the banks will see more courtroom action in the future.
No. 3: “We’re not looking to increase our mortgage activity, except with our current retail banking base”
Most banks make the majority of their money from loans. And with mortgages providing a long-term stream of revenue, they are usually the pool of loans most in demand. But for Citigroup Inc (NYSE:C), that doesn’t seem to be a priority.