“Citi could be a $90 stock by 2020 given the kind of capital they’re going to retire,” Peabody said Monday in an interview on Bloomberg Television.
Bloomberg News reports that Citigroup and other large banks have built “massive amounts of capital” after selling businesses and assets to meet regulator demands in the wake of the financial crisis, Peabody said. Citigroup will be in a better position to return that surplus to shareholders after 2017, he said.
“Once we get past ‘17, you’re going to see a tremendous amount of capital returned by these money-center banks,” he said. “They’re going to add 4, maybe even 5 percentage points” to their earnings-per-share growth rate.
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