Citigroup Launches New Deposit Solution for Institutional Clients

Financial services major Citigroup Inc. (NYSE: C) recently revealed the launch of a new U.S. accounts deposit sweep solution for institutional clients. The new offering is being launched by Citi’s Treasury and Trade Solutions team via IntraFi Network’s Yankee Sweep service.

Following the news, shares of the company remained almost static. The stock, however, rose marginally to close at $54.32 in Monday’s extended trading session.

Strategic Impact

Money management for institutional clients like corporates, public sector companies and financial institutions involves managing risk, counterparty exposure, daily liquidity and optimizing yield, among others. For this, such clients need to manage cash across multiple banks and/or money market funds.

To effectively manage the same, this new offering from Citi will allow its institutional clients to have additional maneuverability to diversify their deposits across multiple institutions while also ensuring enhanced yields.

Management Commentary

North America Head of Liquidity Management at Citi’s Treasury and Trade Solutions, Michael Berkowitz, said, “Citi is pleased to be the first bank in the U.S. to launch this solution in partnership with IntraFi, one of the most innovative companies in the FinTech Liquidity Management space. The new capabilities will help our clients balance competing demands for returns, risk management, and daily liquidity while simplifying the process to diversify their counter-party exposure.”

Stock Rating

On March 14, Wells Fargo analyst Mike Mayo reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $80 to $70, which implies upside potential of 29.1% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 10 Buys and 9 Holds. The average Citigroup price target of $74.29 implies that the stock has upside potential of 37% from current levels. Shares have declined 26.9% over the past year.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on C. Moreover, 7.8% of portfolios tracked by TipRanks have increased their exposure to Citigroup over the past 30 days.

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