Citigroup Inc. (C) has again hit the headlines again for a breach of security. Personal information of 92,408 of its credit card customers in Japan is said to have been stolen and illegally sold to a third party.
Information that were stolen include account numbers, names, addresses, phone numbers, date of birth, gender as well as the opening dates of accounts. However, Citi has assured that more crucial information such as personal identification numbers and card security codes were not fiddled with. Citi has already placed fraud alerts on these accounts. No suspicious transactions have been detected yet.
Earlier in June, credit card information of over 360,000 Citi accounts was hacked. Besides Citi, Google Inc. (GOOG), Lockheed Martin Corp. (LMT) and Sony Corp. (SNE) have also reported cyber attacks in the recent past. This also questions the level of protection these companies are providing to their customers.
Our Take
Incidents like cyber attacks and the consequent loss incurred by customer dents Citi’s reputation. It also may result in the company losing customers to its competitors who could now take advantage of this faulty system. The extent of client information that has been hacked could be used to gain further financial information by illicit ways.
In a competitive market, Wall Street biggies are not only making aggressive efforts but are also keeping no stone unturned to retain their brand names and customer base. Hence, such an incident is uncalled for.
Citi currently retains its Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we are maintaining a long-term Neutral recommendation on the stock.
