Citigroup shares closed Friday's session with a gain of nearly 6%, reaching $122.69, significantly outperforming its major banking peers. The rally was fueled by a report indicating management's growing optimism about concluding work tied to regulatory consent orders in 2024.
According to sources cited by Reuters, Citi executives believe they can complete the necessary compliance work for orders from the Federal Reserve and the Office of the Comptroller of the Currency later this year. Final approval, however, remains subject to regulatory sign-off. The orders stem from historical risk-management and data-control issues, including a notable $900 million erroneous payment incident.
The stock's advance halted a two-day decline, leaving it roughly 1% below its 52-week peak of $124.17. Analyst commentary reflected a positive outlook, with Wells Fargo's Mike Mayo stating he saw no reason for regulators not to lift the orders, and Goldman Sachs' Richard Ramsden calling the progress updates encouraging.
Looking ahead, the market's focus shifts to two key areas. First, upcoming appearances by Citi executives at the UBS and Bank of America financial services conferences on February 10 and 11 may provide fresh details on the regulatory timeline. Second, major U.S. economic data, including the January employment report and Consumer Price Index, will influence broader rate expectations and bank stock sentiment.
While a resolution of the consent orders represents a significant, company-specific catalyst, the path forward isn't entirely within Citi's control. Regulators will need time to validate the bank's fixes, and any new operational missteps could delay the process and renew investor concerns.
