<

Must-know: Soros Fund Management's positions in 1Q 2014

Part 8
Must-know: Soros Fund Management's positions in 1Q 2014 (Part 8 of 9)

George Soros’ Soros Fund Management sells its stake in Citigroup

Soros Fund Management and Citigroup

Soros Fund Management added new positions in Baker Hughes Inc. (BHI), RF Micro Devices Inc. (RFMD), Devon Energy (DVN), Spansion Inc. (CODE), and Marathon Petroleum (MPC) in 1Q14. The top positions it sold include J.P. Morgan Chase & Co. (JPM), Citigroup (C), and J.C. Penney (JCP).

CEnlarge Graph

George Soros’ Soros Fund Management sold positions in banking giants JPMorgan Chase (JPM) and Citigroup (C) in 1Q 2014. These two positions were initiated in 4Q 2013. JPMorgan and Citigroup had accounted for 1.41% and 1.01%, respectively, of Soros’ total 4Q portfolio.

JPMorgan peer Citigroup beat Street estimates for 1Q14 results. The bank reported net income for the first quarter 2014 of $3.9 billion, or $1.23 per diluted share, on revenues of $20.1 billion. Net income climbed 3.5% while revenue declined 1% year-over-year. Fixed Income Markets revenues of $3.9 billion in the first quarter 2014 declined 18% from the same quarter the previous year, reflecting the uncertain global macro environment as well as strong performance in the prior year in securitized products and local market rates and currencies. Citigroup’s net income increased 4% versus the prior year, driven by lower expenses and lower net credit losses, partially offset by lower revenues and a higher effective tax rate.

C HedgeEnlarge Graph

Citi said in its quarterly filing that its results for the first quarter of 2014 continued to reflect a challenging operating environment. Compared to the prior-year period, results reflected significantly lower mortgage origination volumes in North America, an uncertain macro environment that negatively impacted fixed income markets within the Institutional Clients Group (ICG), and ongoing spread compression globally. The company said it expects these factors will continue to negatively affect the operating environment and Citi’s results during the remainder of 2014.

Citi said that on March 26, 2014, the Federal Reserve Board rejected the capital plan Citi submitted as part of the 2014 Comprehensive Capital Analysis and Review (or CCAR), which means the bank won’t be able to increase its return of capital to shareholders as it had requested. The bank is also seeing an investigation over a $400 million fraud involving Citigroup’s Mexican unit, Banamex, related to Mexican oil services company Oceanografía.

The Realist Discussions