Boston, MA 12/18/2013 (wallstreetpr) – Citigroup Inc (NYSE:C), the third largest bank in the U.S. by assets, has been stabilizing its balance sheet since it survived the financial crisis. In the process, the bank has been reasonably mean in dividend payout.
In the past few years, the bank has been cleaning its excesses while shoring up the balance sheet. This has resulted in steadying profits over the past four years. The company’s data reveal that since 2010, its earnings per share have been rising whereby it earned $3.60 in 2010 and raised it to $3.69 in 2011, before hitting $3.86 in 2012. And its normalized earning by the end of 2013 is put at $4.70 per share.
This means that while a lot of efforts to stabilize the bank are still underway, the progress made so far puts C in the right growth path.
In compliance with regulatory directives, the bank has also been consolidating its assets and exiting non-core businesses. This has been going on for the past years since the end of the financial recession. This means that C is gradually plugging its financial losses.
Now that Citigroup Inc (NYSE:C) has stabilized its balance sheet and raised its book value, it can comfortably start raising dividend payout to shareholders. Stakeholders could start seeing higher dividend in the next 24 months if the present growth is sustained.
Presently the bank pays a penny in dividend on each of its diluted shares. When the bank needed to raise $14.5 billion to survive the financial crisis, it offered fresh shares which raised its shares outstanding from 499 million in 2007 to 3 billion.
It is thus expected that as Citigroup Inc (NYSE:C) increases dividend payout, it would also aggressively embark on shares buyback to raise the value of its outstanding shares. This will be a good thing for the shareholders as it means returning cash to their pockets.
