Citigroup In Focus After Bank Denies Report Of Regional Lender Acquisition Plans – C Stock Falls 3%

• The report added that Citigroup may be eyeing U.S. regional banks with roughly $500 billion in assets.
• Sources also told Bloomberg that Citi has discussed the possibility of acquiring a brokerage firm such as Stifel Financial Corp. or Raymond James Financial.
• Citi denied the report, calling it ‘baseless speculation.’

Citigroup Inc. (C) drew retail investor attention on Friday after a report said the bank is exploring a potential acquisition, signaling a possible shift from its long-standing focus on internal restructuring.

According to a Bloomberg report on Friday, senior executives have held early discussions about buying a large U.S. regional bank to boost deposits and strengthen lending and trading capacity.

Citi Denies ‘Baseless Speculation’ But Stock Trades Lower

The bank denied the report, calling it “baseless speculation.” “The suggestion that Citi is planning to buy a regional bank, wealth brokerage - or any other financial services firm - is baseless speculation,” the bank said in a statement as seen by Bloomberg. “At this time, we are solely focused on growing organically by executing our strategy and completing our transformation.”

The news about the potential acquisition sent the stock tumbling. C shares traded down 3%.

Truist Financial, PNC Financial Services Under Consideration

The report added that Citigroup may be eyeing U.S. regional banks with roughly $500 billion in assets, a group that includes Truist Financial Corp (TFC) and PNC Financial Services Group (PNC), both valued at over $50 billion. A deal of that size would rank among the largest acquisitions in U.S. banking history.

Both PNC and TFC shares edged marginally lower at the time of writing.

Sources also told Bloomberg that Citi has discussed the possibility of acquiring a brokerage firm such as Stifel Financial Corp. or Raymond James Financial Inc. Such a move would expand the bank’s access to high-net-worth clients while adding a stable stream of fee-based revenue.

How Did Retail Traders React?

Retail sentiment on Stocktwits turned ‘bearish’ from ‘neutral’ a day earlier, amid ‘high’ message volumes.

One user stated that if banks are buying, it means the economy is not in a bad shape.

Another user called the stock’s price movement “insane manipulation.”

Year-to-date, C shares have declined around 4%.

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