Citigroup CEO on Trump's policy changes: 'It's a matter of when and not if'
Citigroup (C) CEO Mike Corbat said on a conference call Thursday he believes President Donald Trump will be able to make good on his pro-growth policy promises, including tax reform.
“While the details of potential policy changes in the areas such as tax code and infrastructure spending have yet to be worked out and will take longer than originally projected, we continue to believe that it’s a matter of when and not if these changes will occur,” Corbat said during the company’s first-quarter conference.
“As that process unfolds and becomes clearer, I expect business will react accordingly as sentiment shifts from optimism to confidence,” he added.
Corbat also said he has been engaged with the Trump administration and feels confident in the message it’s trying to send.
“Not just myself but a number of us in the industry have been very engaged with the administration,” he said. “The tone from the top is an important message and signal. I think we’ve seen very clearly that the president and administration is pro-growth and pro-jobs.”
While uncertainty has increased surrounding the likelihood that Trump can fulfill his agenda, particularly following the failed health care reform bill, expectations remain somewhat upbeat for regulatory reform, according to analysts.
Earlier this year, the president signed an executive order instructing regulators to examine financial rules and file a report on their findings.
Corbat said his team has been involved and that conversations with the administration have been positive.
“The presidential orders he put out, which I think is one of the first real signs along the way here in terms of what’s going to be focused on and where things go—we’ve obviously been involved and commented in terms of things that could be focused on and should be focused on, and we’ll see what Secretary Mnuchin comes back with. But at this point, I would call the conversations with the administration very constructive.”
The company is hoping that changes in policy will help the company return more of its large capital buffer to shareholders, as the overall return on equity at the firm, at 7.4%, improved but still fell short of its cost of capital, at 10%.
Meanwhile, regulatory costs have moderated, according to Citi CFO John Gerspach.
“[Regulatory] cost is still running high, but it’s plateaued,” Gerspach said on the conference call. “That’s given us now the opportunity to shift some of the investment more away from just doing regulatory work and put investment dollars toward supporting the businesses, which has been great.”