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Essay / Research Paper Abstract
An 11 page paper discussing the disparity between Citigroup's growth and return on equity. Despite record levels of revenue, ROE has been falling slightly but steadily over the past three years. Analysis by the DuPont identity reveals that Citigroup's net income to revenue ratio has been falling as well, as has revenues to assets. This is seen as being a temporary situation, particularly as Citigroup travels through a self-imposed moratorium on new large acquisitions. Citigroup continues to set records in total revenues, and it is unlikely to allow itself to simply wither away. The bank likely will return to its robust growth after it has taken some time to adjust to its new, ever-larger size. Bibliography lists 10 sources.
Page Count:
11 pages (~225 words per page)
File: CC6_KSbankCiti.rtf
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Unformatted sample text from the term paper:
Inc. has a holding company structure, conducting its business activities "through the Global Consumer, Global Corporate and Investment Bank (GCIB), Private Client Services, Global Investment Management (GIM) and Proprietary Investment
Activities segments" (Citigroup Inc., 2005). It has 253,000 employees and operates in more than 100 countries. Citigroup CFO Todd Thomson aptly
describes the banking business as being that of taking risk. He says, "When youre in the business of taking risk, every once in a while youre going to lose
money, and we do" (Reason, 2003; p. 79). In the early years of the new century, the organization also was found to be implicated in several of the accounting
and management scandals that unfolded with such frightening rapidity. Despite record levels of revenue, ROE has been falling slightly but steadily over the
past three years. Analysis by the DuPont identity reveals that Citigroups net income to revenue ratio has been falling as well, as has revenues to assets. This is
seen as being a temporary situation, particularly as Citigroup travels through a self-imposed moratorium on new large acquisitions.
Citigroup has been creative - legally - in finding benefit in potentially draining situations. An example lies with its IPO of Travelers Property Casualty Corporation, acquired
in October 1998 at the height of the "merger mania" in the banking industry throughout the decade of the 1990s. Citigroup issued an IPO of 21 percent of the
merged company in March 2002. In December 2003, it issued another 5,477,416,254 of the 15 billion shares authorized in the company. Citigroup
...