As part of its effort to overhaul the U.S. Consumer Banking arm, Citibank, the banking unit of Citigroup Inc. (C) has appointed two Regional Heads for this division.
Jerome Byers has been appointed as Regional President of Consumer Banking for its Central Region overseeing branches from Illinois to Texas, while Kathryn Dinkin has been hired as Regional President of Consumer Banking for its East Region, which comprises of branches from Boston to Miami. In total, the East Region is comprised of Boston, Philadelphia, New York, New Jersey, Connecticut, Florida, and Washington D.C. – inclusive of both Maryland and Virginia.
Prior to joining Citi, both of them have served as Regional Presidents in Wells Fargo & Company (WFC). As Atlanta Regional President for Wells Fargo, Byers was in charge of overseeing 200 banking locations and 5,000 team members while Dinkin served as Regional President of Southeast Florida at Wells Fargo.
The strategic hires are to support Citi’s revamp initiative. It is segregating its U.S. Consumer Banking into three key regions — East, Central and West — and each of these regions will be headed by a regional president.
Last month, Citi reported second-quarter 2011 earnings per share of $1.09, outpacing the Zacks Consensus Estimate of 96 cents. The better-than-expected result was driven by a drop in provisions for credit losses.
The top-line headwind at Citi continued with the revenue dipping from the prior-year period. However, the quarterly revenue managed to exceed the Zacks Consensus Estimate. Expenses also increased year over year.
A favorable result of Citi is encouraging; yet, we find that it still has way to go in improving its top line. Shrinking revenue base and regulatory issues remains an overhang. The tardy economic recovery and escalating expenses are somewhat limiting its earnings growth.
However, in the long term, we believe investments in core franchise will help garner a solid market share and support Citi’s earnings.Such strategic hires are also expected to augment the company’s top line. It also has comparatively less exposure to mortgage related problems than many of its peers.
Citi shares are maintaining a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the company’s business model and fundamentals, we have a long-term Neutral recommendation on the stock.
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