If you're currently on the lookout for investment opportunities following the recent fluctuations in the stock market, Citigroup (NYSE: C) stands out as a particularly appealing option. The bank's stock is currently trading at an impressive 27% discount to its tangible book value, which has caught the attention of savvy investors focused on finding value amidst market volatility.

Under the leadership of CEO Jane Fraser, who has been at the helm since 2021, Citigroup is striving to enhance its operational efficiency and overall performance. Recently, the bank reported robust earnings for the first quarter, showcasing its commitment to achieving long-term strategic goals. As the stock is now priced below $70 per share, it presents itself as a potentially solid buy for those investors who prioritize value. Heres a closer look at why Citigroup is worth considering for your portfolio.

Citigroup's Transformation Journey

Citigroup is recognized as one of the largest banking institutions in the United States; however, it has continuously faced challenges that have hindered its performance compared to larger peers. One significant factor is its expansive and sometimes unwieldy business model, which has led to regulatory actions, including hefty fines imposed for ongoing deficiencies identified over the years. Consequently, Citigroup has consistently underperformed in key metrics such as return on equity.

Since taking the role of CEO, Jane Fraser has been determined to turn around the struggling bank. Faced with a legacy of poor performance and compliance issues, she has made bold decisions, including cutting bonuses for top executives, streamlining management layers, and concentrating efforts on core business functions. In a bid to rectify longstanding regulatory issues, Citigroup has recently added thousands of dedicated staff while reducing reliance on outside IT contractors, particularly focusing on improving data governance and compliance controls.

In its latest earnings report for the first quarter, Citigroup exceeded analysts' expectations in both revenue and earnings. CEO Fraser remarked that the services division achieved its best first-quarter revenue in a decade, contributing to a net income of $4 billionan impressive 21% increase year over year. These results signal a positive shift in the bank's trajectory and demonstrate the effectiveness of Fraser's strategic direction.

One important measure of profitability that Fraser is keen to improve is the return on tangible common equity (ROTCE). This metric is crucial as it reflects how efficiently the bank utilizes its capital to generate profits, specifically focusing on tangible common equity while excluding goodwill and intangible assets. Fraser has set ambitious targets, aiming to boost ROTCE to between 10% and 11% by the next year. Encouragingly, the bank has made significant strides, with its ROTCE improving to 9.1% in the first quarter, up from 7.6% a year prior.

Market Volatility and Potential Challenges Ahead

However, potential challenges loom on the horizon that could impact Citigroup's revenue streams. Specifically, a slower-than-expected recovery in capital markets in 2025 could pose difficulties. Investment banks had initially anticipated that the Trump administration would ease stringent regulations surrounding major financial deals, thereby boosting advisory revenues and invigorating deal-making activity. Contrary to these expectations, the administration appears poised to maintain the strict guidelines established under the previous chair of the Federal Trade Commission (FTC), Lina Khan.

In conclusion, while Citigroup presents a compelling opportunity for value-focused investors, it is crucial to remain aware of the broader market dynamics and challenges the bank may face in the near future. With ongoing efforts to improve efficiency and profitability under Jane Fraser's leadership, investors may find that now is the perfect time to engage with this financial giant.