Citigroup Analyst Says Digital Push Should Lift Operating Profit

Citigroup Inc (NYSE: C) is betting big the future of banking is digital, and consumers appear to agree with the strategy, according to The Wall Street Journal.

Citigroup is shrinking its physical footprint and focusing on offering a complete digital banking experience, WSJ said.

The focus on digital may be paying off already, as the company added $1 billion in digital deposits in the first quarter of 2019, WSJ said. 

Two-thirds of the digital deposits came from new customers, and more than half came from clients who don't live within proximity of a Citigroup branch.

Why It's Important

Despite lowering its physical footprint at a faster rate than its peers, Citigroup is attracting new clients and increasing consumer deposits through its digital banking platform, Tigress Financial Partners' Ivan Feinseth said in his daily newsletter.

The company's increased focus on digital banking could result in higher operating profits, the analyst said. 

Citigroup also made investments in reorganizing its structure by merging its banking and credit card services and upgrading its mobile app to included graded credit card functionality, Feinseth said. 

Citi's strong banking business is likely to create new growth opportunities and better global market penetration, he said. 

What's Next

Citi's stock has room for "significant upside" potential, and investors should continue being buyers of the stock, Feinseth said. 

Citi shares were higher by 1.45 percent at $58.58 at the time of publication Tuesday. 

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