These firms maintain a positive view on Citigroup due to the relatively attractive valuation of the stock, with the shares trading below tangible book value, strong capital levels, sizeable amount of loan loss reserves, and potential for faster growth from emerging markets. Its recent shift to the customer-driven model and run down of its legacy problem assets, which should ultimately reduce its risk and free up capital, remains impressive. The company’s presence in the emerging markets provide another growth avenue and would help mitigate the impact of the US financial regulation and the sluggish loan growth. The company also looks well positioned to return excess capital to shareholders, but likely in 2012 with its strong capital position. In addition, the firms view Citigroup as having less exposure to private-label mortgage put-back risk, and lower-than-average exposure to the Durbin amendment debit card price controls. The risk/reward profile on the shares continues to improve steadily as management continues to work on its credibility gap with investors and discounted share price. Expectations for improving credit quality in the coming quarters, together with the company’s moderating drag tied to Holdings and increasing capital flexibility, should begin to improve profits and accelerate book value.