Markets & Finance

Lehman Keeps 'Strong Buy' on Citigroup


Citigroup (C) agreed to acquire Golden State Bancorp (GSB) for a total of about $5.8 billion in cash and stock. Lehman Brothers views the deal positively for Citigroup.

Analyst Chip Dickson says the acquisition of GSB is consistent with Citigoup's strategic objective to grow profitability of its U.S. retail banking franchise, and he thinks it is being done at a attractive return. Based on preliminary calculations, the deal should return about 13% on investment before cost savings, and 15% including cost savings, he says.

He notes the deal expands Citigroup's distribution in key markets (California is the largest U.S. deposit market, while Nevada is one of the fastest growing deposit markets), builds its deposit base to $400 billion and more. He reiterated a strong buy rating on the stock.


Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus