Citigroup reported strong profitability in Q3, with earnings per share of USD 1.86 and a return on tangible equity of 8%. Adjusted EPS was USD 2.24 with a ROTE of 9.7%. Shares rose 4% post-results, but analysts are cautious about the bank’s ability to sustain returns over the long term.

The bank’s business mix, including trading, investment banking, credit cards, and wealth management, is thriving in the current market conditions. Despite positive results, analysts plan to maintain the USD 82 per share fair value estimate for Citigroup, considering the stock to be expensive.

Citigroup sold a 25% stake in Banamex to a Mexican billionaire’s company for USD 9.2 billion. The move aligns with the bank’s strategy to exit Mexico’s retail operations and pave the way for a potential public listing or another transaction for the remaining stake. Regulators are likely to view the stake sale positively.

Read more at Morningstar: Favorable Market Conditions Boost Profitability; View Banamex Deal Positively