Citigroup to Sell Venezuela Operations to BNC
Citigroup (C) recently announced that its operations in Venezuela are set to be acquired by Venezuelan bank, Banco Nacional de Crédito (BNC) for an undisclosed amount. The deal is likely to close sometime in the forthcoming weeks.
Citigroup had opened its offices in Venezuela in 1917. Markedly, the number of employees of the company’s operations in Venezuela has been steadily decreasing over the past few years. Insiders revealed to Bloomberg that Citigroup currently has fewer than 100 employees in the country, all of whom will be given the option of continuing with BNC. (See Citigroup stock chart on TipRanks)
Jorge Nogueroles, President and CEO, BNC, said, “BNC is committed to supporting Citi’s clients in Venezuela who will continue receiving high-quality financial services while benefiting from the advantages of an expanding local bank with a skilled professional team and a modern technological platform.”
On July 6, KBW analyst David Konrad initiated coverage of Citigroup with a Buy rating on the stock at a price target of $85, implying a 22.4% upside potential to current levels.
Konrad believes that the possibility of the Federal Reserve raising short-term rates should positively impact large-cap banks, despite the recent volatility and uncertainty due to reflation, or the first phase of economic recovery after a period of contraction.
He further explained that higher rates will be a growth booster for banks. The analyst noted that universal banks have “compelling transformational and restructuring stories expected to drive improved shareholder value.”
Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average Citigroup price target of $89.73 implies 29.2% upside potential to current levels.
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