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Back of Napkin

Citigroup Inc. C

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Citigroup's return on tangible common equity went from 8.7% to 13.0% in a year, and the shares are priced at 1.31 times tangible book.

JPMorgan earns 29% on the same measure and is priced at 3.14 times. That gap is the entire question.

C · price with moving averages

Daily · 6MWeekly · 3Y
$30$60$91$121$151 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Citi does five things. Services moves money and holds securities for corporations and governments, which is a genuine franchise with few competitors at global scale. Markets runs the dealing desks. Banking advises and lends to companies. Wealth manages money for rich people. United States Personal Banking issues branded and retail credit cards.

For a decade the problem was not the businesses, it was that there were too many of them in too many countries, run on technology that could not report consistently. The current management has been selling and closing rather than buying.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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