Citigroup's Expenses Could Finally Start Falling in 2024. It Could Mark a Key Turning Point in the Bank's Transformation.

After years of lagging returns, Citigroup (NYSE: C) embarked on a multiyear transformation plan at the beginning of 2021 that involves disposing of 14 international consumer

banking units, ramping up investment in its stronger-performing businesses, and modernizing the bank. As one might imagine, to do a transformation of this magnitude at such

a large and sprawling institution like Citigroup requires a lot of investment, which leads to elevated expenses. Not only did Citigroup expenses rise a lot in 2022, which hurt the

bank's earnings, but it is expecting more of the same this year. However, management said on Citigroup's recent earnings call that it expects to "bend the curve on expenses

toward the end of 2024." This could mark a major turning point in the bank's transformation. Here's why. Expense growth is partly required and partly opportunistic While

Citigroup is conducting a broad transformation, it is also dealing with regulatory issues. In 2020, regulators slapped Citigroup with a $400 million civil fine and told the bank

to correct long-standing issues related to its compliance, data, and risk management controls. But the bank had already been investing to improve its control infrastructure

before the enforcement action, and it has also decided to do its broader transformation as it makes the necessary regulatory improvements.