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1 Thing Investors Are Missing About Citigroup

Patrick Morris
November 23, 2013

Citigroup (NYSE: C) is a household name and gets lumped into a class of megabanks that we all seemingly know well But there's one surprising thing that may miss the eye of the casual observer when it comes to this giant bank.

Like Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), and Wells Fargo (NYSE: WFC), Citigroup has an expansive business model that offers a host of banking services to pretty much anyone and everyone. But did you know that Citigroup not only has an immense presence here in the United States, but it also has an incredible presence internationally?

The breadth of its international scale and scope is unique when compared with the other biggest banks. Consider the distribution of its assets by region:

Source: Company earnings report

While certainly the other banks I mentioned have an international presence, none are as diversified as Citigroup. Consider that Bank of America and Wells Fargo disclose only their top 20 non-U.S. exposure by countries in their 10-Q filings. JPMorgan Chase does outline the revenue in loans by region for its Corporate and Investment Bank and its Asset Management businesses, but in its earnings releases, few are as open about their international presence as Citi.

Strong international consumer business
One of the most interesting things about Citi is not just that it's international, but that its consumer business is largely international as well. The other banks I mentioned have large presences in their corporate banking and asset-management services, but Citi is the lone name that has an expansive consumer business as well.

For example, did you know that Citi is the No 1 issuer of credit cards globally? Or that its retail bank has 23.9 million customers in North America, 20.7 million customers in Latin America, and 15.1 million customers in Asia? But the bank is diversified not just among regions, but also among countries within those regions as well.

Consider its revenue composition by country over the past year, where approximately $18.5 billion, or 48%, of its total consumer banking revenue came from outside North America. It certainly has a big presence in Mexico, but it is heavily diversified elsewhere across the globe:

Source: Company investor relations.

As of last count, Citi had more than 62 million customers in 36 countries, with deposits totaling $330 million. In fact, one of the more interesting things about the global consumer bank is that although it has represented only approximately 25% of Citigroup's assets, over the past 12 months it has generated nearly 50% of the company's net income. Clearly, Citi has a uniquely expansive international presence and exposure -- but the curious thing is how well it has performed of late.

Recent performance
Year to date, excluding the impact of foreign exchange rates, Citi has seen both the revenue and income of its global consumer business take a turn for the worse:

Source: Company SEC fvilings.

It's troubling to watch net income move in the wrong direction, but Citi largely attributed it to lower mortgage banking activity in the United States, financial reform in Mexico, and worsening consumer credit, and regulatory changes in South Ko