Is there anything that sets one bank apart from the rest? The true answer is "nothing," since banks in the United States proceed to combine and oligopolize. Citigroup Inc. (C) is the fourth-largest American bank by assets, with double the resources of the fifth-largest. Throughout the 1970s, Citibank brought the ATM, as well as certificates of deposit as well as compound interest on savings accounts, to the United States. More questionable methods of construction have also been used by the bank. For example, Citigroup received $25 billion in government money through the Troubled Asset Relief Program during the 2008 housing crisis, which rewarded mismanaged institutions.

Before any other Secretary of the Treasury generously opened the public faucet into Citi's pockets, the bank's stock price had dropped from nearly $500 to $35 in less than a year and a half. As of June 2020, Citi's market capitalization is expected to be about $123.87 billion after many splits and reverse split since its inception. It is a component of the exchange-traded fund known as the ProShares UltraPro Short S&P500 ETF. There were $20.7 billion in sales in the first quarter of 2020 compared to $18.6 billion in the first quarter of 2019. Here's a look at how Citibank generates its money.

How Citigroup Makes Money

According to Citi's first-quarter financial supplement, these are the company's main income streams:

Global Consumer Banking

Traditional banking is precisely what you're looking at here. Credit cards, mortgage origination, retail banking, and commercial banking are the company's core business lines. At little more than $10 billion for the first three months of 2013, Citi's worldwide consumer banking division was the super bank's biggest income generator. Bank of America made $9.5 billion, while JPMorgan Chase (JPM 1.60 percent) generated $11.6 billion in the same period.

Securities And Banking

Citi's corporate as well as investment banking is made up of classic Wall Street moneymakers like capital services, making markets, and managing wealth. These lines of business brought in $7 billion for Citi during the first quarter, making them the bank's second-largest income source. According to JPMorgan, it earned $10.1 billion from corporate as well as investment banking in the first quarter of this year.

Transaction Services

Cash management, securities, trade, and fund services are provided by Citi Transaction Services to multinational enterprises, financial institutions, and governments throughout the world. Simply said, transaction services facilitate the transfer of funds between individuals and organizations. At $2.6 billion in sales for the first three months, Citi's financial services division ranked third in terms of revenue generation.

Citi Holdings

At Citigroup's "bad bank," the super bank liquidated its most hazardous investments after the crisis. Citigroup's Citi Holdings unit has historically been a loss-making unit rather than a revenue-generating one, although it generated $901 million in net revenue in the first quarter.

Global Reach

Over 160 countries are represented by Citi's activities, which are divided into North America, Asia Pacific, Latin America, as well as Europe/the Middle East/Africa areas. Specifically focusing on consumer banking in North America, Citi has by far the highest profit margins. In the first quarter of 2020, the continent brought in more than $5.2 billion in revenue. Credit cards, the mainstay of most banks' profit margins, account for around half of the total, or $2.1 billion.

Citi still has a limited presence in Europe, the Middle East, and Africa. Western Europe has no interest in Citibank. There are no significant markets in France, Germany, or the United Kingdom in this region; Poland, Russia, and also the United Arab Emirates are the most important ones in this region. Global consumer banking revenues for the first quarter of 2020 were just $3.4 billion. The typical debt amounts are significantly higher in Latin America.

This quarter, consumer banking in the United States brought in $1.19 billion in revenue. That leaves Asia, where Citi's securities banking is the biggest compared to its consumer banking in the region. In the first quarter of 2020, deposits, loans, and insurance accounted for $1.7 billion in consumer banking income on the continent with the world's biggest and most populated population.

Conclusion

In order for Citi to grow as large as it is, it has a hand in practically every aspect of global business. To put it another way, this means that Citibank has a lot of potential to generate money but also a lot of potential for losing focus, making errors, and losing money. You now have a basis for assessing Citigroup's investment potential.