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Citi and Emirates NBD launch round-the-clock USD clearing

EditorAhmed Abdulazez Abdulkadir
Published 2024/06/12, 14:10
© Reuters.

DUBAI - Citi (NYSE: C) and Emirates NBD, a prominent banking group in the MENAT region, have announced a collaboration to introduce a 24/7 USD Clearing service in the Middle East, marking a first in the region. Emirates NBD becomes the first bank to implement Citi's continuous USD Clearing service, enabling its corporate and retail clients to conduct cross-border USD transactions at any time, including weekends and holidays.

The service is initially rolling out in the United Arab Emirates and the Kingdom of Saudi Arabia, with plans to extend across Emirates NBD's entire Middle Eastern network and internationally. This move aims to streamline the payment process, which is often hindered by varying weekend schedules and early afternoon transaction cut-offs in the UAE.

Shahmir Khaliq, Head of Services at Citi, emphasized the importance of meeting consumer expectations for instant payment capabilities globally. He noted that the collaboration is a significant step towards providing an 'always on' experience for banks and their customers, leveraging Citi's leading cross-border payments and clearing capabilities.

According to Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD, the initiative will support the growth of their clients by offering them the flexibility to transfer funds without time restrictions imposed by cut-offs and holidays.

Citi's 24/7 USD Clearing service, which has been adopted by over 130 financial institution clients since 2022, is a critical component that enables continuous USD payment services between Emirates NBD branches. It allows financial institutions to make USD payments to Citi's network of 1,500 financial institution customers worldwide at any time.

In other recent news, Citigroup has seen a series of developments. Viswas Raghavan has taken up his role as the new head of banking, brought in to rejuvenate the bank's services to multinational corporations. This follows the bank's Q1 investment banking revenue of $903 million, trailing behind competitors. Analyst Mike Mayo from Wells Fargo (NYSE:WFC) has shown optimism towards Citigroup, selecting it as his top stock pick.

In analyst perspectives, Goldman Sachs has upgraded Citigroup to a "Buy" rating, with a price target of $68, based on expectations of growth and benefits from the bank's business simplification strategy. CFRA, another financial research firm, raised Citigroup's price target from $67.00 to $71.00, maintaining a Buy rating, and expressing optimism about the bank's potential for growth.

On the operational front, Citigroup has directed around 600 U.S. employees to resume full-time office work, marking a shift from its previous remote work stance. However, the majority of its workforce will continue to follow hybrid schedules.

In legal news, a lawsuit has been filed against Citigroup by former managing director Kathleen Martin, who alleges she was wrongfully terminated for refusing to provide misleading information to regulators. Citigroup has responded, stating the lawsuit is baseless and they intend to contest it vigorously.

InvestingPro Insights

As Citi (NYSE: C) forges ahead with its innovative 24/7 USD Clearing service in partnership with Emirates NBD, the financial giant's market presence and valuation metrics provide a broader context for its strategic moves. With a market capitalization of $112.81 billion, Citi stands as a prominent player in the banking industry, a status underscored by the InvestingPro Tip highlighting its role in the Banks sector.

InvestingPro Data indicates a P/E ratio of 17.29, which adjusts to a lower 15.22 when looking at the last twelve months as of Q1 2024, suggesting a potentially more attractive valuation in recent times. Despite a slight revenue decline of 2.4% over the last twelve months as of Q1 2024, Citi has maintained dividend payments for an impressive 14 consecutive years, with a current dividend yield of 3.58%.

Investors and analysts keeping a close eye on Citi's performance will note the significant 25.31% price uptick over the last six months, a point of interest considering the bank's global expansion efforts and continuous investment in payment technologies.

For those seeking to delve deeper into Citi's financial health and future prospects, InvestingPro provides additional insights. Currently, there are 8 more InvestingPro Tips available, which could guide potential investors in making informed decisions. To access these valuable tips, visit https://www.investing.com/pro/C and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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