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Citigroup shares pop 3% as bank kicks off first investor day since financial crisis

  • Citi shares rose 3 percent in opening trade.
  • CEO Michael Corbat said in prepared remarks that the firm has "crossed an inflection point."
  • The bank will reach an 11 percent return on tangible common equity by 2020, according to a presentation.
Michael Corbat, chief executive officer of Citigroup Inc.
Drew Angerer | Bloomberg | Getty Images
Michael Corbat, chief executive officer of Citigroup Inc.

Citi shares rose 3 percent in opening trade Tuesday as the financial firm provided more optimistic projections for profit growth during its first investor day since May 2008.

"As you know, it has been a while since we have hosted an Investor Day," Citi CEO Michael Corbat said in prepared remarks Tuesday.

The bank said it expects to boost profit per share by 80 percent over the next three years, from $5 to $9, largely through share buybacks and the performance of its businesses. It said its projections imply a stock price of around $100. The shares are trading around $68 now.

The bank also recently said it would double its quarterly dividend to 32 cents.

Citi hasn't hosted an investor day since the financial crisis, a wrenching time for the financial industry and Citi itself.

"Some people have asked why now?" Corbat said. "We chose this time because we, the management and our board, believe Citi has crossed an inflection point."

The bank will reach an 11 percent return on tangible common equity by 2020, according to a slide from CFO John Gerspach's presentation.

"We are now clearly on a path to both growth and stronger returns," Corbat said.

Citi shares 2-day performance (extended hours)

Source: FactSet

Corbat noted the firm has "returned to growth in Asia and Mexico Consumer."

Citi shares closed at $66.10 a share Monday, up 11 percent for the year but still far below the $591.25 price hit in August 2000, according to FactSet.