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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10- K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
Commission file number 1- 9924
Citigroup Inc.(Exact name of registrant as specified in its charter)
Delaware 52- 1568099(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
399 Park Avenue, New York, NY 10043(Address of principal executive offices) (Zip code)
Registrants telephone number, including area code: (212) 559- 1000
Securities registered pursuant to Section 12(b) of the Act: See Exhibit 99.01
Securities registered pursuant to Section 12(g) of the Act: none
ndicate by check mark if the Registrant is a well- known seasoned issuer, as defined in Rule 405 of the Securities Act. t Yes X No
ndicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. t Yes X No
ndicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has
een subject to such filing requirements for the past 90 days. X Yes t No
ndicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every InteractiveData File required to be submitted and posted pursuant to Rule 405 of Regulation S- T (232.405 of this chapter) during the preceding 12months (or for such shorter period that the Registrant was required to submit and post such files). X Yes t No
ndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S- K (229.405 of this chapter) is not containederein, and will not be contained, to the best of Registrants knowledge, in definitive proxy or information statements incorporated byeference in Part III of this Form 10- K or any amendment to this Form 10- K. t
ndicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer or a smaller reportingompany. See the definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b- 2 of the
Exchange Act.
X Large accelerated filer t Accelerated filer t Non- accelerated filer t Smaller reporting company
(Do not check if a smaller reporting company)
ndicate by check mark whether the Registrant is a shell company (as defined in Rule 12b- 2 of the Exchange Act). t Yes X No
The aggregate market value of Citigroup Inc. common stock held by non- affiliates of Citigroup Inc. on June 30, 2010 was approximately108.8 billion.
Number of shares of common stock outstanding on January 31, 2011: 29,056,025,228
Documents Incorporated by Reference: Portions of the Registrants Proxy Statement for the annual meeting of stockholders scheduled to beeld on April 21, 2011, are incorporated by reference in this Form 10- K in response to Items 10, 11, 12, 13 and 14 of Part III.
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1
0- K CROSS- REFERENCE INDEX
This Annual Report on Form 10- K incorporates the requirements of the accounting profession and the Securities and Exchange Commission.
Form 10- K
em Number Page
Part I
1. Business 4- 33, 37, 114- 121,
124- 125, 162, 281- 282
1A. Risk Factors 51- 60
1B. Unresolved Staff Comments Not Applicable
2. Properties 282- 283
3. Legal Proceedings 263- 268
4. (Removed and Reserved)
Part II
5. Market for Registrants Common
Equity, Related StockholderMatters, and Issuer Purchases of
Equity Securities 40, 169, 279,
283- 284, 286
6. Selected Financial Data 8- 9
7. Managements Discussion and
Analysis of Financial Condition
and Results of Operations 4- 50, 61- 113
7A. Quantitative and Qualitative
Disclosures About Market Risk 61- 113, 163- 164,
183- 208,
211- 255
8. Financial Statements and
Supplementary Data 131- 280
9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure Not Applicable
9A. Controls and Procedures 122- 123
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9B. Other Information Not Applicable
Part III
10. Directors, Executive Officers and
Corporate Governance 285- 286, 288*
11. Executive Compensation **
12. Security Ownership of CertainBeneficial Owners and
Management and Related
Stockholder Matters ***
13. Certain Relationships and Related
Transactions, and Director
Independence ****
14. Principal Accounting Fees and
Services *****
Part IV
15. Exhibits and Financial Statement
Schedules
* For additional information regarding Citigroups Directors, see Corporate Governance, Proposal 1: Election ofDirectors and Section 16(a) Beneficial Ownership Reporting Compliance in the definitive Proxy Statement forCitigroups Annual Meeting of Stockholders scheduled to be held on April 21, 2011, to be filed with the SEC (the ProxyStatement), incorporated herein by reference.
** See Executive CompensationCompensation Discussion and Analysis, 2010 Summary Compensation Table andThe Personnel and Compensation Committee Report in the Proxy Statement, incorporated herein by reference.
*** See About the Annual Meeting, Stock Ownership and Proposal 3: Approval of Amendment to the Citigroup 2009Stock Incentive Plan in the Proxy Statement, incorporated herein by reference.
**** See Corporate GovernanceDirector Independence, Certain Transactions and Relationships, CompensationCommittee Interlocks and Insider Participation, Indebtedness, Proposal 1: Election of Directors and ExecutiveCompensation in the Proxy Statement, incorporated herein by reference.
***** See Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm in the Proxy Statement,incorporated herein by reference.
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CITIGROUPS 2010 ANNUAL REPORT ON FORM 10- K
OVERVIEW 4
CITIGROUP SEGMENTS AND REGIONS 5
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 6EXECUTIVE SUMMARY 6
RESULTS OF OPERATIONS 8
IVE- YEAR SUMMARY OF SELECTED
FINANCIAL DATA 8
SEGMENT, BUSINESS AND PRODUCT
INCOME (LOSS) AND REVENUES 10
CITICORP 12
Regional Consumer Banking 13
North America Regional Consumer Banking 14
EMEA Regional Consumer Banking 16
Latin America Regional Consumer Banking 18
Asia Regional Consumer Banking 20
Institutional Clients Group 22
Securities and Banking 23
Transaction Services 25
CITI HOLDINGS 26
Brokerage and Asset Management 27
Local Consumer Lending 28
Special Asset Pool 30
CORPORATE/OTHER 33
BALANCE SHEET REVIEW 34
Segment Balance Sheet at December 31, 2010 37
CAPITAL RESOURCES AND LIQUIDITY 38
Capital Resources 38
Funding and Liquidity 44
CONTRACTUAL OBLIGATIONS 50
RISK FACTORS 51
MANAGING GLOBAL RISK 61
Risk ManagementOverview 61
Risk Aggregation and Stress Testing 62
Risk Capital 62
Credit Risk 63
Loan and Credit Overview 63
Loans Outstanding 64Details of Credit Loss Experience 66
Impaired Loans, Non- Accrual
Loans and Assets, and
Renegotiated Loans 68
U.S. Consumer Mortgage Lending 72
North America Cards 79
Consumer Loan Details 83
Consumer Loan Modification Programs 85
Consumer Mortgage Representations and Warranties 90
Securities and Banking- Sponsored Private Label
Residential Mortgage Securitizations 93
Corporate Loan Details 94
Exposure to Commercial Real Estate 96
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Market Risk 97
Operational Risk 106
Country and Cross- Border Risk
Management Process;
Sovereign Exposure 108
DERIVATIVES 110
SIGNIFICANT ACCOUNTING POLICIES AND
SIGNIFICANT ESTIMATES 114
DISCLOSURE CONTROLS AND PROCEDURES 122
MANAGEMENTS ANNUAL REPORT ON
INTERNAL CONTROL OVER FINANCIAL
REPORTING 123
ORWARD- LOOKING STATEMENTS 124
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRMINTERNAL
CONTROL OVER FINANCIAL REPORTING 126
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
CONSOLIDATED FINANCIAL STATEMENTS 127
INANCIAL STATEMENTS AND NOTES TABLE
OF CONTENTS 129
CONSOLIDATED FINANCIAL STATEMENTS 131
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS 139
INANCIAL DATA SUPPLEMENT (Unaudited) 280
Ratios 280
Average Deposit Liabilities in Offices
Outside the U.S. 280
Maturity Profile of Time Deposits
($100,000 or more) in U.S. Offices 280
SUPERVISION AND REGULATION 281
CUSTOMERS 282
COMPETITION 282PROPERTIES 282
EGAL PROCEEDINGS 283
UNREGISTERED SALES OF EQUITY;
PURCHASES OF EQUITY SECURITIES;
DIVIDENDS 283
PERFORMANCE GRAPH 284
CORPORATE INFORMATION 285
Citigroup Executive Officers 285
CITIGROUP BOARD OF DIRECTORS 288
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OVERVIEW
ntroduction
Citigroups history dates back to the founding of Citibank in 1812. Citigroups original corporate predecessor was incorporated in 1988 under the
aws of the State of Delaware. Following a series of transactions over a number of years, Citigroup Inc. was formed in 1998 upon the merger of
Citicorp and Travelers Group Inc.
Citigroup is a global diversified financial services holding company whose businesses provide consumers, corporations, governments and
nstitutions with a broad range of financial products and services. Citi has approximately 200 million customer accounts and does business in more
han 160 countries and jurisdictions.Citigroup currently operates, for management reporting purposes, via two primary business segments: Citicorp, consisting of Citis Regional
Consumer Banking businesses and Institutional Clients Group; and Citi Holdings, consisting of Citis Brokerage and Asset Management and Local
Consumer Lending businesses, and a Special Asset Pool. There is also a third segment, Corporate/Other. For a further description of the business
egments and the products and services they provide, see Citigroup Segments below, Managements Discussion and Analysis of Financial
Condition and Results of Operations and Note 4 to the Consolidated Financial Statements.
Throughout this report, Citigroup, Citi and the Company refer to Citigroup Inc. and its consolidated subsidiaries.
Additional information about Citigroup is available on the companys Web site at www.citigroup.com. Citigroups recent annual reports on Form
0- K, quarterly reports on Form 10- Q, current reports on Form 8- K, as well as its other filings with the SEC are available free of charge through the
ompanys Web site by clicking on the Investors page and selecting All SEC Filings. The SECs Web site also contains periodic and current
eports, proxy and information statements, and other information regarding Citi at www.sec.gov.
Within this Form 10- K, please refer to the tables of contents on pages 3 and 129 for page references to Managements Discussion and Analysis
f Financial Condition and Results of Operations and Notes to Consolidated Financial Statements, respectively.
At December 31, 2010, Citi had approximately 260,000 full- time employees compared to approximately 265,300 full- time employees at
December 31, 2009.
Please see Risk Factors below for a discussion ofcertain risks and uncertainties that could materially impact
Citigroups financial condition and results of operations.
Certain reclassifications have been made to the prior periods financial statements to conform to the current periods presentation.
mpact of Adoption of SFAS 166/167
As previously disclosed, effective January 1, 2010, Citigroup adopted Accounting Standards Codification (ASC) 860, Transfers and Servicing,
ormerly SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (SFAS 166), and ASC 810,
Consolidations, formerly SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167). Among other requirements, the adoption of
hese standards includes the requirement that Citi consolidate certain of its credit card securitization trusts and cease sale accounting for transfers of
redit card receivables to those trusts. As a result, reported and managed- basis presentations are comparable for periods beginning January 1, 2010.
or comparison purposes, prior period revenues, net credit losses, provisions for credit losses and for benefits and claims and loans are presented
where indicated on a managed basis in this Form 10- K. Managed presentations were applicable only to Citis North American branded and retail
artner credit card operations in North America Regional Consumer Banking and Citi HoldingsLocal Consumer Lending and any aggregations in
which they are included. See Capital Resources and Liquidity and Note 1 to the Consolidated Financial Statements for an additional discussion ofhe adoption of SFAS 166/167 and its impact on Citigroup.
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As described above, Citigroup is managed pursuant to the following segments:
The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results above.
(1) Asia includes Japan, Latin America includes Mexico, and North America comprises the U.S., Canada and Puerto Rico.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS
EXECUTIVE SUMMARY
010 Summary Results
During 2010, Citi continued to execute its strategy of growing and investing in its core businesses in CiticorpRegional Consumer Banking,
ecurities and Banking and Transaction Serviceswhile at the same time winding down the assets and businesses in Citi Holdings in an
conomically rational manner.
Citigroup
Citigroup reported net income for 2010 of $10.6 billion, compared to a net loss of $1.6 billion in 2009. Diluted EPS was $0.35 per share in 2010
ersus a loss of $0.80 per share in 2009, and net revenues were $86.6 billion in 2010, versus $91.1 billion in 2009, on a comparable basis. On aeported basis, net interest revenue increased by $5.7 billion, or 12%, to $54.7 billion in 2010, generally as a result of the adoption of SFAS 166/167,
artially offset by the continued run- off of higher- yielding assets in Citi Holdings and investments in lower- yielding securities. Non- interest
evenues improved by approximately $578 million, or 2%, to $31.9 billion in 2010, primarily due to positive gross revenue marks in the Special
Asset Pool in Citi Holdings of $2.0 billion in 2010 versus negative revenue marks of $4.6 billion in 2009, a $11.1 billion gain in 2009 on the sale of
mith Barney, a $1.4 billion pretax gain related to the public and private exchange offers consummated in July and September of 2009, and a $10.1
illion pretax loss associated with the repayment of TARP and the exit from the loss- sharing agreement with the U.S. government in December
009.
Citicorp
Despite continued weaker market conditions, Citicorp net income remained strong in 2010 at $14.9 billion versus $15.3 billion in 2009, with earnings
n Asia and Latin America contributing more than half of the total. The continued strength of the core Citi franchise was demonstrated by Citicorp
evenues of $65.6 billion for 2010, with a 3% growth in revenues in Regional Consumer Banking on a comparable basis and a 3% growth in
Transaction Services, offset by lower revenues in Securities and Banking.
Business drivers in international Regional Consumer Banking reflected the impact in 2010 of the accelerating pace of economic recovery in
egions outside of North America and increased investment spending by Citi:
Revenues of $17.7 billion were up 9% year over year.Net income more than doubled to $4.2 billion.Average deposits and average loans each grew by 12% year over year.
Card purchase sales grew 17% year over year.
Securities and Banking revenues declined 15% to $23.1 billion in 2010. Excluding the impact of credit value adjustments (CVA), revenues were
own 19% year over year to $23.5 billion. The decrease mainly reflected the impact of lower overall client market activity and more challenging
lobal capital market conditions in 2010, as compared to 2009, which was a particularly strong year driven by robust fixed income markets and
igher client activity levels in investment banking, especially in the first half of the year.
Citi Holdings
Citi Holdings net loss decreased 52%, from $8.9 billion to $4.2 billion, as compared to 2009. Lower revenues reflected the absence of the $11.1
illion pretax gain on the sale of Smith Barney in 2009 as well as a declining loan balance resulting mainly from asset sales and net paydowns.
Citi Holdings assets stood at $359 billion at the end of 2010, down $128 billion, or 26%, from $487 billion at the end of 2009. Adjusting for the
mpact of adopting SFAS 166/167, which added approximately $43 billion of assets to the balance sheet on January 1, 2010, Citi Holdings assets
were down by $171 billion during 2010, consisting of approximately:
$108 billion in asset sales and business dispositions;
$50 billion of net run- off and paydowns; and
$13 billion of net cost of credit and net asset marks.
As of December 31, 2010, Citi Holdings represented 19% of Citigroup assets, as compared to 38% in the first quarter of 2008. At December 31,
010, Citi Holdings risk- weighted assets were approximately $330 billion, or 34%, of total Citigroup risk- weighted assets.
Credit Costs
Global credit continued to recover with the sixth consecutive quarter of sustained improvement in credit costs in the fourth quarter of 2010. For the
ull year, Citigroup net credit losses declined $11.4 billion, or 27%, to $30.9 billion in 2010 on a comparable basis, reflecting improvement in net
redit losses in every region. During 2010, Citi released $5.8 billion in net reserves for loan losses and unfunded lending commitments, primarilyriven by international Regional Consumer Banking, retail partner cards in Local Consumer Lending and the Corporate loan portfolio, while it built
8.3 billion of reserves in 2009. The total provision for credit losses and for benefits and claims of $26.0 billion in 2010 decreased 50% on a
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omparable basis year over year.
Net credit losses in Citicorp declined 10% year- over- year on a comparable basis to $11.8 billion, and Citicorp released $2.2 billion in net
eserves for loan losses and unfunded lending commitments, compared to a $2.9 billion reserve build in 2009. Net credit losses in Citi Holdings
eclined 35% on a comparable basis to $19.1 billion, and Citi Holdings released $3.6 billion in net reserves for loan losses and unfunded lending
ommitments, compared to a $5.4 billion reserve build in 2009.
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Operating Expenses
Citigroup operating expenses were down 1% versus the prior year at $47.4 billion in 2010, as increased investment spending, FX translation, and
nflation in Citicorp were more than offset by lower expenses in Citi Holdings. In Citicorp, expenses increased 10% year over year to $35.9 billion,mainly due to higher investment spending across all Citicorp businesses as well as FX translation and inflation. In Citi Holdings, operating expenses
were down 31% year over year to $9.6 billion, reflecting the continued reduction of assets.
Capital and Loan Loss Reserve Positions
Citi increased its Tier 1 Common and Tier 1 Capital ratios during 2010. At December 31, 2010, Citis Tier 1 Common ratio was 10.8% and its Tier 1
Capital ratio was 12.9%, compared to 9.6% and 11.7% at December 31, 2009, respectively. Tier 1 Common was relatively flat year over year at $105illion, even after absorbing a $14.2 billion reduction from the impact of SFAS 166/167 in the first quarter, while total risk- weighted assets declined
0% to $978 billion.
Citigroup ended the year with a total allowance for loan losses of $40.7 billion, up $4.6 billion, or 13%, from the prior year, reflecting the impact
f adopting SFAS 166/167 which added $13.4 billion on January 1, 2010. The allowance represented 6.31% of total loans and 209% of non- accrual
oans as of December 31, 2010, up from 6.09% and 114%, respectively, at the end of 2009. The consumer loan loss reserve was $35.4 billion at
December 31, 2010, representing 7.77% of total loans, versus $28.4 billion, or 6.70%, at December 31, 2009.
Liquidity and Funding
Citigroup maintained a high level of liquidity, with aggregate liquidity resources (including cash at major central banks and unencumbered liquid
ecurities) of $322 billion at year- end 2010, up from $316 billion at year- end 2009. Citi also continued to grow its deposit base, closing 2010 with
845 billion in deposits, up 1% from year- end 2009. Structural liquidity (defined as deposits, long- term debt and equity as a percentage of total
ssets) remained strong at 73% as of December 31, 2010, flat compared to December 31, 2009, and up from 66% at December 31, 2008.
Citigroup issued approximately $22 billion (excluding local country and securitizations) of long- term debt in 2010, representing just over half ofs 2010 long- term maturities, due to its strong liquidity position and proceeds received from asset reductions in Citi Holdings. For additional
nformation, see Capital Resources and LiquidityFunding and Liquidity below.
011 Business Outlook
n 2011, management will continue its focus on growing and investing in the core Citicorp franchise, while economically rationalizing Citi Holdings.
However, Citigroups results will continue to be affected by factors outside of its control, such as the global economic and regulatory environment in
he regions in which Citi operates. In particular, the macroeconomic environment in the U.S. remains challenging, with unemployment levels stilllevated and continued pressure and uncertainty in the housing market, including home prices. Additionally, the continued implementation of the
Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010 (Financial Reform Act), including the ongoing extensive rulemaking and
nterpretive issues, as well as the new capital standards for bank holding companies as adopted by the Basel Committee on Banking Supervision
Basel Committee) and U.S. regulators, will remain a significant source of uncertainty in 2011. Moreover, the implementation of the change in
methodology for calculating FDIC insurance premiums, to be effective in the second quarter 2011, will have a negative impact on Citis earnings.
For additional information on these factors, see Capital Resources and Liquidity and Risk Factors below.)
In Citicorp, Securities and Banking results for 2011 will depend on the level of client activity and on macroeconomic conditions, market
aluations and volatility, interest rates and other market factors. Transaction Services business performance will also continue to be impacted by
macroeconomic conditions as well as market factors, including interest rate levels, global economic and trade activity, volatility in capital markets,
oreign exchange and market valuations.
In Regional Consumer Banking, results during the year are likely to be driven by different trends in North America versus the international
egions. In North America, if economic recovery is sustained, revenues could grow modestly, particularly in the second half of the year, assuming
oan demand begins to recover. However, net credit margin in North America will likely continue to be driven primarily by improvement in net credit
osses. Internationally, given continued economic expansion in these regions, net credit margin is likely to be driven by revenue growth, particularlyn the second half of the year, as investment spending should continue to generate volume growth to outpace spread compression. International credit
osts are likely to increase in 2011, reflecting a growing loan portfolio.
In Citi Holdings, revenues for Local Consumer Lending should continue to decline reflecting a shrinking loan balance resulting from paydowns
nd asset sales. Based on current delinquency trends and ongoing loss- mitigation actions, credit costs are expected to continue to improve. Overall,
owever, Local Consumer Lending will likely continue to drive results in Citi Holdings.
Operating expenses are expected to show some variability across quarters as the Company continues to invest in Citicorp while rationalizing Citi
Holdings and maintaining expense discipline. Although Citi currently expects net interest margin (NIM) to remain under pressure during the first
uarter of 2011, driven by continued low yields on investments and the run- off of higher yielding loan assets, NIM could begin to stabilize during
he remainder of the year.
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RESULTS OF OPERATIONS
IVE- YEAR SUMMARY OF SELECTED FINANCIAL DATAPAGE 1 Citigroup Inc. and Consolidated Subsidiaries
n millions of dollars, except per- share amounts, ratios and direct staff 2010 (1)(2)2009 (2) 2008 (2) 2007 (2) 2006 (2)
et interest revenue $54,652 $48,914 $53,749 $45,389 $37,928
on- interest revenue 31,949 31,371 (2,150) 31,911 48,399
Revenues, net of interest expense $86,601 $80,285 $51,599 $77,300 $86,327Operating expenses 47,375 47,822 69,240 58,737 50,301
rovisions for credit losses and for benefits and claims 26,042 40,262 34,714 17,917 7,537
ncome (loss) from continuing operations before income taxes $13,184 $(7,799) $(52,355) $ 646 $28,489
ncome taxes (benefits) 2,233 (6,733) (20,326) (2,546) 7,749
ncome (loss) from continuing operations $10,951 $(1,066) $(32,029) $3,192 $20,740
ncome (loss) from discontinued operations, net of taxes (3) (68) (445) 4,002 708 1,087
et income (loss) before attribution of noncontrolling interests $10,883 $(1,511) $(28,027) $3,900 $21,827
et income (loss) attributable to noncontrolling interests 281 95 (343) 283 289
Citigroups net income (loss) $10,602 $(1,606) $(27,684) $3,617 $21,538
ess:
Preferred dividendsBasic $ 9 $2,988 $1,695 $ 36 $ 64
Impact of the conversion price reset related to the $12.5 billion
convertible preferred stock private issuanceBasic 1,285
Preferred stock Series H discount accretionBasic 123 37
Impact of the public and private preferred stock exchange offer 3,242
Dividends and undistributed earnings allocated to participating
securities, applicable to Basic EPS 90 2 221 261 512ncome (loss) allocated to unrestricted common shareholders forasic EPS $10,503 $(9,246) $(29,637) $3,320 $20,962
Less: Convertible preferred stock dividends (540) (877) Add: Incremental dividends and undistributed earnings allocated to
articipating securities,
applicable to Diluted EPS 2 2
ncome (loss) allocated to unrestricted common shareholders foriluted EPS $10,505 $(8,706) $(28,760) $3,320 $20,964
arnings per share
Basic
ncome (loss) from continuing operations 0.37 (0.76) (6.39) 0.53 4.07
et income (loss) 0.36 (0.80) (5.63) 0.68 4.29
Diluted (4)
ncome (loss) from continuing operations $ 0.35 $(0.76) $ (6.39) $ 0.53 $ 4.05
et income (loss) 0.35 (0.80) (5.63) 0.67 4.27
Dividends declared per common share 0.00 0.01 1.12 2.16 1.96
Statement continues on the next page, including notes to the table.
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IVE- YEAR SUMMARY OF SELECTED FINANCIAL DATAPAGE 2 Citigroup Inc. and Consolidated Subsidiaries
n millions of dollars, except per- share amounts, ratiosnd direct staff 2010 (1) 2009 (2) 2008 (2) 2007 (2) 2006 (2)
At December 31
otal assets $1,913,902 $1,856,646 $1,938,470 $2,187,480 $1,884,167
otal deposits 844,968 835,903 774,185 826,230 712,041
ong- term debt 381,183 364,019 359,593 427,112 288,494
Mandatorily redeemable securities of subsidiary trustsncluded in long- term debt) 18,131 19,345 24,060 23,756 8,972
Common stockholders equity 163,156 152,388 70,966 113,447 118,632
otal stockholders equity 163,468 152,700 141,630 113,447 119,632
irect staff (in thousands) 260 265 323 375 327
Ratios
Return on average common stockholders equity (5) 6.8% (9.4)% (28.8)% 2.9% 18.8%
Return on average total stockholders equity (5) 6.8 (1.1) (20.9) 3.0 18.7
ier 1 Common (6) 10.75% 9.60% 2.30% 5.02% 7.49%
ier 1 Capital 12.91 11.67 11.92 7.12 8.59
otal Capital 16.59 15.25 15.70 10.70 11.65
everage (7) 6.60 6.87 6.08 4.03 5.16
Common stockholders equity to assets 8.52% 8.21% 3.66% 5.19% 6.30%
otal stockholders equity to assets 8.54 8.22 7.31 5.19 6.35
ividend payout ratio (8) NM NM NM 322.4 45.9
ook value per common share $ 5.61 $ 5.35 $ 13.02 $ 22.71 $ 24.15Ratio of earnings to fixed charges and preferred stock
ividends 1.52x NM NM 1.01x 1.50x
1) On January 1, 2010, Citigroup adopted SFAS 166/167. Prior periods have not been restated as thestandards were adopted prospectively. See Note 1 to the Consolidated Financial Statements.
2) On January 1, 2009, Citigroup adopted SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements (now ASC 810- 10- 45- 15, Consolidation: Noncontrolling Interest in a Subsidiary),
and FSP EITF 03- 6- 1, Determining Whether Instruments Granted in Share- Based Payment
Transactions Are Participating Securities (now ASC 260- 10- 45- 59A, Earnings Per Share:Participating Securities and the Two- Class Method). All prior periods have been restated to conform tothe current periods presentation.
3) Discontinued operations for 2006 to 2009 reflect the sale of Nikko Cordial Securities to Sumitomo MitsuiBanking Corporation, the sale of Citigroups German retail banking operations to Crdit Mutuel, and thesale of CitiCapitals equipment finance unit to General Electric. In addition, discontinued operations for2006 include the operations and associated gain on sale of substantially all of Citigroups assetmanagement business. Discontinued operations for 2006 to 2010 also include the operations andassociated gain on sale of Citigroups Travelers Life & Annuity; substantially all of Citigroupsinternational insurance business; and Citigroups Argentine pension business sold to MetLife Inc.Discontinued operations for the second half of 2010 also reflect the sale of The Student LoanCorporation. See Note 3 to the Consolidated Financial Statements.
4) The diluted EPS calculation for 2009 and 2008 utilizes basic shares and income allocated to unrestrictedcommon stockholders (Basic) due to the negative income allocated to unrestricted commonstockholders. Using diluted shares and income allocated to unrestricted common stockholders (Diluted)would result in anti- dilution.
5) The return on average common stockholders equity is calculated using net income less preferred stockdividends divided by average common stockholders equity. The return on total stockholders equity iscalculated using net income divided by average stockholders equity.
6) As defined by the banking regulators, the Tier 1 Common ratio represents Tier 1 Capital less qualifyingperpetual preferred stock, qualifying noncontrolling interests in subsidiaries and qualifying mandatorilyredeemable securities of subsidiary trusts divided by risk- weighted assets.
7) The Leverage ratio represents Tier 1 Capital divided by adjusted average total assets.8) Dividends declared per common share as a percentage of net income per diluted share.M Not meaningful
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SEGMENT, BUSINESS AND PRODUCTINCOME (LOSS) AND REVENUES
The following tables show the income (loss) and revenues for Citigroup on a segment, business and product view:
CITIGROUP INCOME (LOSS)
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
ncome (loss) from continuing operations
CITICORP
Regional Consumer Banking
North America $ 607 $ 730 $ (1,504) (17)% NM
EMEA 103 (209) 50 NM NM
Latin America 1,885 525 (3,083) NM NM
Asia 2,172 1,432 1,770 52 (19)%
Total $ 4,767 $ 2,478 $ (2,767) 92% NM
ecurities and Banking
North America $ 2,537 $ 2,385 $ 2,395 6%
EMEA 1,832 3,426 588 (47) NM
Latin America 1,072 1,536 1,113 (30) 38%
Asia 1,138 1,838 1,970 (38) (7)
Total $ 6,579 $ 9,185 $ 6,066 (28)% 51%
ransaction Services
North America $ 544 $ 615 $ 323 (12)% 90%
EMEA 1,224 1,287 1,246 (5) 3
Latin America 653 604 588 8 3
Asia 1,253 1,230 1,196 2 3
Total $ 3,674 $ 3,736 $ 3,353 (2)% 11%
Institutional Clients Group $ 10,253 $ 12,921 $ 9,419 (21)% 37%
otal Citicorp $ 15,020 $ 15,399 $ 6,652 (2)% NM
CITI HOLDINGSBrokerage and Asset Management $ (203) $ 6,937 $ (851) NM NM
ocal Consumer Lending (4,993) (10,416) (8,357) 52% (25)%
pecial Asset Pool 1,173 (5,369) (27,289) NM 80
otal Citi Holdings $ (4,023) $ (8,848) $ (36,497) 55% 76%
Corporate/Other $ (46) $ (7,617) $ (2,184) 99% NM
ncome (loss) from continuing operations $ 10,951 $ (1,066) $ (32,029) NM 97%
Discontinued operations $ (68) $ (445) $ 4,002 NM NM
et income (loss) attributable to noncontrolling interests 281 95 (343) NM NM
Citigroups net income (loss) $ 10,602 $ (1,606) $ (27,684) NM 94%
M Not meaningful
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CITIGROUP REVENUES
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
CITICORP
Regional Consumer Banking
North America $ 14,790 $ 8,576 $ 8,607 72% %
EMEA 1,511 1,555 1,865 (3) (17)
Latin America 8,727 7,917 9,488 10 (17)
Asia 7,414 6,766 7,461 10 (9)
Total $ 32,442 $ 24,814 $ 27,421 31% (10)%
ecurities and Banking
North America $ 9,392 $ 8,833 $ 10,821 6% (18)%
EMEA 6,842 10,049 5,963 (32) 69
Latin America 2,532 3,421 2,374 (26) 44
Asia 4,318 4,806 5,570 (10) (14)
Total $ 23,084 $ 27,109 $ 24,728 (15)% 10%
ransaction Services
North America $ 2,483 $ 2,526 $ 2,161 (2)% 17%
EMEA 3,356 3,389 3,677 (1) (8)
Latin America 1,490 1,373 1,439 9 (5)
Asia 2,705 2,501 2,669 8 (6)
Total $ 10,034 $ 9,789 $ 9,946 3% (2)%
Institutional Clients Group $ 33,118 $ 36,898 $ 34,674 (10)% 6%
Total Citicorp $ 65,560 $ 61,712 $ 62,095 6% (1)%
CITI HOLDINGS
Brokerage and Asset Management $ 609 $ 14,623 $ 7,963 (96)% 84%
ocal Consumer Lending 15,826 17,765 23,498 (11) (24)
pecial Asset Pool 2,852 (3,260) (39,699) NM 92
otal Citi Holdings $ 19,287 $ 29,128 $ (8,238) (34)% NM
Corporate/Other $ 1,754 $ (10,555) $ (2,258) NM NM
otal net revenues $ 86,601 $ 80,285 $ 51,599 8% 56%
M Not meaningful
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CITICORP
Citicorp is the Companys global bank for consumers and businesses and represents Citis core franchise. Citicorp is focused on providing best- in-
lass products and services to customers and leveraging Citigroups unparalleled global network. Citicorp is physically present in approximately 100ountries, many for over 100 years, and offers services in over 160 countries and jurisdictions. Citi believes this global network provides a strong
oundation for servicing the broad financial services needs of large multinational clients and for meeting the needs of retail, private banking,
ommercial, public sector and institutional customers around the world. Citigroups global footprint provides coverage of the worlds emerging
conomies, which Citi believes represent a strong area of growth. At December 31, 2010, Citicorp had approximately $1.3 trillion of assets and $760
illion of deposits, representing approximately 67% of Citis total assets and approximately 90% of its deposits.
Citicorp consists of the following businesses: Regional Consumer Banking (which includes retail banking and Citi- branded cards in four
egionsNorth America, EMEA, Latin America and Asia) and Institutional Clients Group (which includes Securities and Banking and Transaction
ervices).
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Net interest revenue $38,820 $34,432 $35,328 13% (3)%
Non- interest revenue 26,740 27,280 26,767 (2) 2
otal revenues, net of interest expense $ 65,560 $61,712 $62,095 6% (1)%
rovisions for credit losses and for benefits and claims
Net credit losses $11,789 $ 6,155 $ 4,984 92% 23%
Credit reserve build(release) (2,167) 2,715 3,405 NM (20)
Provision for loan losses $ 9,622 $ 8,870 $ 8,389 8% 6%
Provision for benefits and claims 151 164 176 (8) (7)
Provision for unfunded lending commitments (32) 138 (191) NM NM
Total provisions for credit losses and for benefits and claims $ 9,741 $ 9,172 $ 8,374 6% 10%
otal operating expenses $35,859 $32,640 $44,625 10% (27)%
ncome from continuing operations before taxes $19,960 $19,900 $ 9,096 NM
rovisions for income taxes 4,940 4,501 2,444 10% 84%
ncome from continuing operations $15,020 $15,399 $ 6,652 (2)% NM
et income attributable to noncontrolling interests 122 68 29 79 NM
Citicorps net income $14,898 $15,331 $ 6,623 (3)% NM
Balance sheet data (in billions of dollars)otal EOP assets $ 1,283 $ 1,138 $ 1,067 13% 7%
Average assets 1,257 1,088 1,325 16% (18)%
otal EOP deposits 760 734 675 4% 9%
M Not meaningful
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REGIONAL CONSUMER BANKING
Regional Consumer Banking (RCB) consists of Citigroups four RCB businesses that provide traditional banking services to retail customers. RCB
lso contains Citigroups branded cards business and Citis local commercial banking business. RCB is a globally diversified business with over
,200 branches in 39 countries around the world. During 2010, 54% of total RCB revenues were from outside North America. Additionally, the
majority of international revenues and loans were from emerging economies in Asia, Latin America, Central and Eastern Europe and the Middle
East. At December 31, 2010, RCB had $330 billion of assets and $309 billion of deposits.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $ 23,244 $16,404 $17,275 42% (5)%
on- interest revenue 9,198 8,410 10,146 9 (17)
otal revenues, net of interest expense $32,442 $24,814 $27,421 31% (10)%
otal operating expenses $ 16,454 $15,041 $23,618 9% (36)%
Net credit losses $ 11,221 $ 5,410 $ 4,068 NM 33%
Credit reserve build (release) (1,543) 1,819 2,091 NM (13)
Provisions for unfunded lending commitments (4)
Provision for benefits and claims 151 164 176 (8)% (7)
rovisions for credit losses and for benefits and claims $ 9,825 $ 7,393 $ 6,335 33% 17%
ncome (loss) from continuing operations before taxes $ 6,163 $ 2,380 $ (2,532) NM NM
ncome taxes (benefits) 1,396 (98) 235 NM NM
ncome (loss) from continuing operations $ 4,767 $ 2,478 $ (2,767) 92% NM
et income (loss) attributable to noncontrolling interests (9) 11 (100)
et income (loss) $ 4,776 $ 2,478 $ (2,778) 93% NM
verage assets (in billions of dollars) $ 311 242 268 29% (10)%
Return on assets 1.54% 1.02% (1.04)%
otal EOP assets $ 330 $ 256 $ 245 29 5
verage deposits (in billions of dollars) 295 275 269 7 2
et credit losses as a percentage of average loans 5.07% 3.63% 2.58%
Revenue by business
Retail banking $ 15,834 $14,842 $15,427 7% (4)%
Citi- branded cards 16,608 9,972 11,994 67 (17)
Total $ 32,442 $24,814 $27,421 31% (10)%
ncome (loss) from continuing operations by business
Retail banking $ 3,231 $ 2,593 $ (3,592) 25% NM
Citi- branded cards 1,536 (115) 825 NM NM
Total $ 4,767 $ 2,478 $ (2,767) 92% NM
M Not meaningful
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NORTH AMERICA REGIONAL CONSUMER BANKING
North America Regional Consumer Banking (NA RCB) provides traditional banking and Citi- branded card services to retail customers and small to
mid- size businesses in the U.S. NA RCBs approximate 1,000 retail bank branches and 13.1 million retail customer accounts are largely
oncentrated in the greater metropolitan areas of New York, Los Angeles, San Francisco, Chicago, Miami, Washington, D.C., Boston, Philadelphia,
nd certain larger cities in Texas. At December 31, 2010, NA RCB had $30.7 billion of retail banking and residential real estate loans and $144.8
illion of average deposits. In addition, NA RCB had 21.2 million Citi- branded credit card accounts, with $77.5 billion in outstanding card loan
alances.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $ 11,216 $ 5,204 $ 4,332 NM 20%
on- interest revenue 3,574 3,372 4,275 6% (21)
otal revenues, net of interest expense $14,790 $ 8,576 $ 8,607 72%
otal operating expenses $ 6,224 $ 5,987 $ 9,105 4% (34)%
Net credit losses $ 8,022 $ 1,151 $ 617 NM 87%
Credit reserve build (release) (313) 527 465 NM 13
Provisions for benefits and claims 24 50 4 (52)% NM
rovisions for loan losses and for benefits and claims $ 7,733 $ 1,728 $ 1,086 NM 59%
ncome (loss) from continuing operations before taxes $ 833 861 $ (1,584) (3)% NM
ncome taxes (benefits) 226 131 (80) 73 NMncome (loss) from continuing operations $ 607 $ 730 $ (1,504) (17)% NM
et income attributable to noncontrolling interests
et income (loss) $ 607 $ 730 $ (1,504) (17)% NM
verage assets (in billions of dollars) $ 119 $ 73 $ 75 63% (3)%
verage deposits (in billions of dollars) $ 145 $ 140 $ 125 4% 12%
et credit losses as a percentage of average loans 7.48% 2.43% 1.39%
Revenue by business
Retail banking $ 5,325 $ 5,237 $ 4,613 2% 14%
Citi- branded cards 9,465 3,339 3,994 NM (16)
Total $ 14,790 $ 8,576 $ 8,607 72%
ncome (loss) from continuing operations by businessRetail banking $ 771 $ 805 $ (1,714) (4)% NM
Citi- branded cards (164) (75) 210 NM NM
Total $ 607 $ 730 $ (1,504) (17)% NM
M Not meaningful
010 vs. 2009
Revenues, net of interest expense increased 72% from the prior year, primarily due to the consolidation of securitized credit card receivables pursuant
o the adoption of SFAS 166/167 effective January 1, 2010. On a comparable basis, Revenues, net of interest expense, declined 3% from the prior
ear, mainly due to lower volumes in branded cards as well as the net impact of the Credit Card Accountability Responsibility and Disclosure Act of
009 (CARD Act) on cards revenues. This decrease was partially offset by better mortgage- related revenues.
Net interest revenue was down 6% on a comparable basis driven primarily by lower volumes in cards, with average managed loans down 7%
rom the prior year, and in retail banking, where average loans declined 11%. The increase in deposit volumes, up 4% from the prior year, was offsety lower spreads in the current interest rate environment.
Non- interest revenue increased 9% on a comparable basis from the prior year mainly driven by better servicing hedge results and higher gains
rom loan sales in mortgages.
Operating expenses increased 4% from the prior year, driven by the impact of litigation reserves in the first quarter of 2010 and higher marketing
osts.
Provisions for loan losses and for benefits and claims increased $6.0 billion primarily due to the consolidation of securitized credit card
eceivables pursuant to the adoption of SFAS 166/167. On a comparable basis, Provisions for loan losses and for benefits and claims decreased $0.9
illion, or 11%, primarily due to a net loan loss reserve release of $0.3 billion in 2010 compared to a $0.5 billion loan loss reserve build in the prior
ear, and lower net credit losses in the branded cards portfolio. Also on a comparable basis, the cards net credit loss ratio increased 61 basis points to
0.02%, driven by lower average loans.
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14
009 vs. 2008
Revenues, net of interest expense were fairly flat as higher credit losses in the securitization trusts were offset by higher net interest margin in cards,
igher volumes in retail banking, and higher gains from loan sales in mortgages.
Net interest revenue was up 20% driven by the impact of pricing actions relating to the CARD Act and lower funding costs in Citi- branded cards,
nd by higher deposit and loan volumes in retail banking, with average deposits up 12% and average loans up 11%.Non- interest revenue declined 21%, driven by higher credit losses flowing through the securitization trusts and by the absence of a $349 million
ain on the sale of Visa shares and a $170 million gain from a cards portfolio sale in 2008. This decline was partially offset by higher gains from loan
ales in mortgages.
Operating expenses declined 34%. Excluding a 2008 goodwill impairment charge of $2.3 billion, expenses were down 12% reflecting the benefits
rom re- engineering efforts, lower marketing costs, and the absence of $217 million of repositioning charges in 2008 offset by the absence of a $159
million Visa litigation reserve release in 2008.
Provisions for credit losses and for benefits and claims increased $642 million, or 59%, primarily due to rising net credit losses in both cards and
etail banking. The continued weakening of leading credit indicators and trends in the macroeconomic environment during the period, including
sing unemployment and higher bankruptcy filings, drove higher credit costs. The cards managed net credit loss ratio increased 376 basis points to
.41%, while the retail banking net credit loss ratio increased 44 basis points to 0.90%.
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009 vs. 2008Revenues, net of interest expense declined 17%. More than half of the revenue decline was attributable to the impact of foreign currency translationFX translation). Other drivers included lower wealth- management and lending revenues due to lower volumes and spread compression from credit
ghtening initiatives. Investment sales declined by 26% due to market conditions at the start of 2009, with assets under management increasing by
% by year end.
Net interest revenue was 23% lower than the prior year due to external competitive pressure on rates and higher funding costs, with average loans
or retail banking down 18% and average deposits down 18%.
Non- interest revenue decreased by 3%, primarily due to the impact of FX translation. Excluding FX translation, there was marginal growth.
Operating expenses declined 27%, reflecting expense control actions, lower marketing expenses and the impact of FX translation. Cost savings
were achieved by branch closures, headcount reductions and process re- engineering efforts.
Provisions for loan losses increased $482 million to $794 million. Net credit losses increased from $237 million to $487 million, while the loan
oss reserve build increased from $75 million to $307 million. Higher credit costs reflected the continued credit deterioration across the region during
he period.
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ATIN AMERICA REGIONAL CONSUMER BANKING
Latin America Regional Consumer Banking (LATAM RCB) provides traditional banking and Citi- branded card services to retail customers and
mall to mid- size businesses, with the largest presence in Mexico and Brazil. LATAM RCB includes branch networks throughout Latin America as
well as Banco Nacional de Mexico, or Banamex, Mexicos second largest bank, with over 1,700 branches. At December 31, 2010, LATAM RCB had
,190 retail branches, with 26.6 million customer accounts, $21.3 billion in retail banking loan balances and $42.6 billion in average deposits. In
ddition, the business had 12.5 million Citi- branded card accounts with $13.4 billion in outstanding loan balances.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $ 6,009 $ 5,399 $ 6,604 11% (18)%
on- interest revenue 2,718 2,518 2,884 8 (13)
otal revenues, net of interest expense $ 8,727 $ 7,917 $ 9,488 10% (17)%
otal operating expenses $ 5,060 $ 4,438 $ 9,123 14% (51)%
Net credit losses $ 1,867 $ 2,433 $ 2,204 (23)% 10%
Credit reserve build (release) (826) 462 1,116 NM (59)
Provision for benefits and claims 127 114 172 11 (34)
rovisions for loan losses and for benefits and claims $ 1,168 $ 3,009 $ 3,492 (61)% (14)%
ncome (loss) from continuing operations before taxes $ 2,499 $ 470 $ (3,127) NM NM
ncome taxes (benefits) 614 (55) (44) NM (25)%
ncome (loss) from continuing operations $1,885 $ 525 $ (3,083) NM NMet (loss) attributable to noncontrolling interests (8) NM
et income (loss) $ 1,893 $ 525 $ (3,083) NM NM
verage assets (in billions of dollars) $ 74 66 $ 83 12% (20)%
Return on assets 2.56% 0.80% (3.72)%
verage deposits (in billions of dollars) $ 40 $ 36 $ 40 11% (10)%
et credit losses as a percentage of average loans 5.79% 8.52% 7.05%
Revenue by business
Retail banking $ 5,075 $ 4,435 $ 4,807 14% (8)%
Citi- branded cards 3,652 3,482 4,681 5 (26)
Total $ 8,727 $ 7,917 $ 9,488 10% (17)%
ncome (loss) from continuing operations by businessRetail banking $ 1,039 $ 749 $ (3,235) 39% NM
Citi- branded cards 846 (224) 152 NM NM
Total $ 1,885 $ 525 $ (3,083) NM NM
M Not meaningful
010 vs. 2009
Revenues, net of interest expense increased 10%, driven by higher loan volumes and higher investment assets under management in the retail
usiness, as well as the impact of FX translation.
Net interest revenue increased 11%, driven by higher loan volumes, primarily in the retail business, and FX translation impact offset by spread
ompression.
Non- interest revenue increased 8%, driven by higher branded cards fee income from increased customer activity.
Operating expenses increased 14% as compared to the prior year, primarily driven by investments and the impact of FX translation. The
ncrease in 2010 was primarily driven by an increase in transaction volumes, higher investment spending and FX translation.
Provisions for loan losses and for benefits and claims decreased 61%, primarily reflecting loan loss reserve releases of $826 million compared to
build of $426 million in the prior year. This decrease resulted from improved credit conditions, improved portfolio quality and lower net creditosses in the branded cards portfolio driven by Mexico, partially offset by higher credit costs attributable to higher volumes, particularly as the year
rogressed.
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009 vs. 2008
Revenues, net of interest expense declined 17%, driven by the impact of FX translation as well as lower activity in the branded cards business.
Net interest revenue decreased 18%, mainly driven by FX translation as well as lower volumes and spread compression in the branded cards
usiness that offset the growth in loans, deposits and investment products in the retail business.
Non- interest revenue decreased 13%, driven also by FX translation and lower branded cards fee income from lower customer activity.
Operating expenses decreased 51%, primarily driven by the absence of the goodwill impairment charge of $4.3 billion in 2008, the benefit
ssociated with FX translation and savings from restructuring actions implemented primarily at the end of 2008. A $125 million restructuring chargen 2008 was offset by an expense benefit of $257 million related to a legal vehicle restructuring. Expenses increased slightly in the fourth quarter
009, primarily due to selected marketing and investment spending.Provisions for loan losses and for benefits and claims decreased 14% primarily reflecting lower loan loss reserve builds as a result of lower
olumes, improved portfolio quality and lower net credit losses in the branded cards portfolio, primarily in Mexico due to repositioning in the
ortfolio.
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ASIA REGIONAL CONSUMER BANKING
Asia Regional Consumer Banking (Asia RCB) provides traditional banking and Citi- branded card services to retail customers and small to mid- size
usinesses, with the largest Citi presence in South Korea, Japan, Taiwan, Singapore, Australia, Hong Kong, India and Indonesia. At December 31,
010, Asia RCB had 711 retail branches, 16.1 million retail banking accounts, $105.6 billion in average customer deposits, and $61.2 billion in retail
anking loans. In addition, the business had 15.1 million Citi- branded card accounts with $20.4 billion in outstanding loan balances.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $ 5,088 $ 4,822 $ 5,070 6% (5)%
on- interest revenue 2,326 1,944 2,391 20 (19)
otal revenues, net of interest expense $ 7,414 $ 6,766 $ 7,461 10% (9)%
otal operating expenses $ 4,001 $ 3,522 $ 3,890 14% (9)%
Net credit losses $ 1,012 $ 1,339 $ 1,010 (24)% 33%
Credit reserve build (release) (285) 523 435 NM 20
rovisions for loan losses and for benefits and claims $ 727 $ 1,862 $ 1,445 (61)% 29%
ncome from continuing operations before taxes $ 2,686 $ 1,382 $ 2,126 94% (35)%
ncome taxes (benefits) 514 (50) 356 NM NM
ncome from continuing operations $ 2,172 $ 1,432 $ 1,770 52% (19)%
et income attributable to noncontrolling interests (1)
et income $ 2,172 $ 1,432 $ 1,771 52% (19)%verage assets (in billions of dollars) $ 108 $ 93 $ 98 16% (5)%
Return on assets 2.01% 1.54% 1.81%
verage deposits (in billions of dollars) $ 100 $ 89 $ 93 12% (4)%
et credit losses as a percentage of average loans 1.36% 2.07% 1.40%
Revenue by business
Retail banking $ 4,604 $ 4,281 $ 4,847 8% (12)%
Citi- branded cards 2,810 2,485 2,614 13 (5)
Total $ 7,414 $ 6,766 $ 7,461 10% (9)%
ncome from continuing operations by business
Retail banking $ 1,461 $ 1,218 $ 1,414 20% (14)%
Citi- branded cards 711 214 356 NM (40)Total $ 2,172 $ 1,432 $ 1,770 52% (19)%
M Not meaningful
010 vs. 2009
Revenues, net of interest expense increased 10%, driven by higher cards purchase sales, investment sales and loan and deposit volumes, as well as the
mpact of FX translation, partially offset by lower spreads.
Net interest revenue was 6% higher than the prior- year period, mainly due to higher lending and deposit volumes and the impact of FX
ranslation, partially offset by lower spreads.
Non- interest revenue increased 20%, primarily due to higher investment revenues, higher cards purchase sales, and the impact of FX translation.
Operating expenses increased 14%, primarily due to an increase in volumes, continued investment spending, and the impact of FX translation.
Provisions for loan losses and for benefits and claims decreased 61%, mainly due to the impact of a net credit reserve release of $285 million in
010, compared to a $523 million net credit reserve build in the prior-
ear period, and a 24% decline in net credit losses. These declines were partially offset by the impact of FX translation. The decrease in provision for
oan losses and for benefits and claims reflected continued credit quality improvement across the region, particularly in India, partially offset by
ncreasing volumes.
During 2010, the effective tax rate in Japan was approximately 19%, which reflected continued tax benefits (APB 23). These benefits are not
kely to continue, or continue at the same levels, in 2011, however, which will likely lead to an increase in the effective tax rate for Asia RCB in
011.
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009 vs. 2008
Revenues, net of interest expense declined 9%, driven by the absence of the gain on Visa shares in 2008, lower investment product revenues and
ards purchase sales, lower spreads, and the impact of FX translation.
Net interest revenue was 5% lower than in 2008. Average loans and deposits were down 10% and 4%, respectively, in each case partly due to the
mpact of FX translation.
Non- interest revenue declined 19%, primarily due to the decline in investment revenues, lower cards purchase sales, the absence of the gain on
Visa shares and the impact of FX translation.
Operating expenses declined 9%, reflecting the benefits of re- engineering efforts and the impact of FX translation. Expenses increased slightly in
he fourth quarter 2009, primarily due to targeted marketing and investment spending.Provisions for loan losses and for benefits and claims increased 29%, mainly due to the impact of a higher credit reserve build and an increase in
et credit losses, partially offset by the impact of FX translation. In the first half of 2009, rising credit losses were particularly apparent in the
ortfolios in India and South Korea. However, delinquencies improved in the latter part of the year and net credit losses flattened as the region
howed early signs of economic recovery and increased levels of customer activity.
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NSTITUTIONAL CLIENTS GROUP
nstitutional Clients Group (ICG) includes Securities and Banking and Transaction Services. ICG provides corporate, institutional, public sector and
igh- net- worth clients with a full range of products and services, including cash management, trade finance and services, securities services, trading,
nderwriting, lending and advisory services, around the world. ICGs international presence is supported by trading floors in approximately 75
ountries and a proprietary network within Transaction Services in over 95 countries. At December 31, 2010, ICG had $953 billion of assets and
451 billion of deposits.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Commissions and fees $ 4,266 $ 4,194 $ 5,136 2% (18)%
dministration and other fiduciary fees 2,747 2,850 3,178 (4) (10)
nvestment banking 3,520 4,687 3,334 (25) 41
rincipal transactions 5,567 5,626 6,102 (1) (8)
Other 1,442 1,513 (1,129) (5) NM
Total non- interest revenue $ 17,542 $18,870 $16,621 (7)% 14%
Net interest revenue (including dividends) 15,576 18,028 18,053 (14)
otal revenues, net of interest expense $33,118 $36,898 $34,674 (10)% 6%
otal operating expenses 19,405 17,599 21,007 10 (16)
Net credit losses 568 745 916 (24) (19)
Provision (release) for unfunded lending commitments (28) 138 (191) NM NMCredit reserve build (release) (624) 896 1,314 NM (32)
rovisions for loan losses and benefits and claims $ (84) $ 1,779 $ 2,039 NM (13)%
ncome from continuing operations before taxes $ 13,797 $17,520 $11,628 (21)% 51%
ncome taxes 3,544 4,599 2,209 (23) NM
ncome from continuing operations $ 10,253 $ 12,921 $ 9,419 (21)% 37%
et income attributable to noncontrolling interests 131 68 18 93 NM
et income $ 10,122 $ 12,853 $ 9,401 (21)% 37%
verage assets (in billions of dollars) $ 946 $ 846 $ 1,057 12% (20)%
Return on assets 1.07% 1.52% 0.89%
Revenues by region
North America $ 11,875 $11,359 $12,982 5% (13)%EMEA 10,198 13,438 9,640 (24) 39
Latin America 4,022 4,794 3,813 (16) 26
Asia 7,023 7,307 8,239 (4) (11)
otal $ 33,118 $36,898 $34,674 (10)% 6%
ncome from continuing operations by region
North America $ 3,081 $ 3,000 $ 2,718 3% 10%
EMEA 3,056 4,713 1,834 (35) NM
Latin America 1,725 2,140 1,701 (19) 26
Asia 2,391 3,068 3,166 (22) (3)
otal $ 10,253 $ 12,921 $ 9,419 (21)% 37%
Average loans by region (in billions of dollars)
North America $ 66 $ 52 $ 58 27% (10)%
EMEA 38 45 56 (16) (20)
Latin America 22 22 25 (12)
Asia 36 28 37 29 (24)
otal $ 162 $ 147 $ 176 10% (16)%
M Not meaningful
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SECURITIES AND BANKING
ecurities and Banking (S&B) offers a wide array of investment and commercial banking services and products for corporations, governments,
nstitutional and retail investors, and high- net- worth individuals. S&B includes investment banking and advisory services, lending, debt and equity
ales and trading, institutional brokerage, foreign exchange, structured products, cash instruments and related derivatives, and private banking. S&B
evenue is generated primarily from fees for investment banking and advisory services, fees and interest on loans, fees and spread on foreign
xchange, structured products, cash instruments and related derivatives, income earned on principal transactions, and fees and spreads on privateanking services.
% Change % Change
n millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $ 9,927 $ 12,377 $ 12,568 (20)% (2)%
on- interest revenue 13,157 14,732 12,160 (11) 21
Revenues, net of interest expense $ 23,084 $ 27,109 $ 24,728 (15)% 10%
otal operating expenses 14,537 13,084 15,851 11 (17)
Net credit losses 563 742 898 (24) (17)
Provisions for unfunded lending commitments (28) 138 (185) NM NM
Credit reserve build (release) (560) 892 1,291 NM (31)
rovisions for loan losses and benefits and claims $ (25) $ 1,772 $ 2,004 NM (12)%
ncome before taxes and noncontrolling interests $ 8,572 $ 12,253 $ 6,873 (30)% 78%
ncome taxes 1,993 3,068 807 (35) NMncome from continuing operations 6,579 9,185 6,066 (28) 51
et income (loss) attributable to noncontrolling interests 110 55 (13) 100 NM
et income $ 6,469 $ 9,130 $ 6,079 (29)% 50%
verage assets (in billions of dollars) $ 875 $ 786 $ 986 11% (20)%
Return on assets 0.74% 1.16% 0.62%
Revenues by region
North America $ 9,392 $ 8,833 $ 10,821 6% (18)%
EMEA 6,842 10,049 5,963 (32) 69
Latin America 2,532 3,421 2,374 (26) 44
Asia 4,318 4,806 5,570 (10) (14)
otal revenues $ 23,084 $ 27,109 $ 24,728 (15)% 10%
et income from continuing operations by region
North America $ 2,537 $ 2,385 $ 2,395 6%
EMEA 1,832 3,426 588 (47) NM
Latin America 1,072 1,536 1,113 (30) 38%
Asia 1,138 1,838 1,970 (38) (7)
otal net income from continuing operations $ 6,579 $ 9,185 $ 6,066 (28)% 51%
ecurities and Banking revenue details
Total investment banking $ 3,828 $ 4,767 $ 3,251 (20)% 47%
Lending 932 (2,480) 4,771 NM NM
Equity markets 3,501 3,183 2,878 10 11
Fixed income markets 14,075 21,296 13,606 (34) 57
Private bank 2,004 2,068 2,326 (3) (11)
Other Securities and Banking (1,256) (1,725) (2,104) 27 18
otal Securities and Banking revenues $ 23,084 $ 27,109 $ 24,728 (15)% 10%
M Not meaningful
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010 vs. 2009
Revenues, net of interest expense of $23.1 billion decreased 15%, or $4.0 billion, from $27.1 billion in 2009, which was a particularly strong year
riven by robust fixed income markets and higher client activity levels in investment banking, especially in the first half of that year. The decline inevenue was mainly due to fixed income markets, which decreased from $21.0 billion to $14.3 billion (excluding CVA, net of hedges, of negative
0.2 billion and positive $0.3 billion in the current year and prior year, respectively). This decrease primarily reflected weaker results in rates and
urrencies, credit products and securitized products, due to an overall weaker market environment. Equity markets declined from $5.4 billion to $3.7
illion (excluding CVA, net of hedges, of negative $0.2 billion and negative $2.2 billion in the current year and prior year, respectively), driven by
ower trading revenues linked to the derivatives business and principal positions. Investment banking revenues declined from $4.8 billion to $3.8
illion, reflecting lower levels of market activity in debt and equity underwriting. The declines were partially offset by an increase in lending
evenues and CVA. Lending revenues increased from negative $2.5 billion to positive $0.9 billion, mainly driven by a reduction in losses on creditefault swap hedges. CVA increased $1.6 billion to negative $0.4 billion, mainly due to a larger narrowing of Citigroup spreads in 2009 compared to
010.
Operating expenses increased 11%, or $1.5 billion. Excluding the 2010 U.K. bonus tax impact and litigation reserve releases in 2010 and 2009,
perating expenses increased 8%, or $1.0 billion, mainly as a result of higher compensation and transaction costs.
Provisions for loan losses and for benefits and claims decreased by $1.8 billion, to negative $25 million, mainly due to credit reserve releases and
ower net credit losses as the result of an improvement in the credit environment during 2010.
009 vs. 2008
Revenues, net of interest expense of $27.1 billion increased 10%, or $2.4 billion, from $24.7 billion, as markets began to recover in the early part of
009, bringing back higher levels of volume activity and higher levels of liquidity, which began to decline again in the third quarter of 2009. The
rowth in revenue was driven mainly by an $8.1 billion increase to $21.0 billion in fixed income markets (excluding CVA, net of hedges, of positive
0.3 billion and positive $0.7 billion in 2009 and 2008, respectively), reflecting strong trading opportunities across all asset classes in the first half of
009. Equity markets doubled from $2.7 billion to $5.4 billion (excluding CVA, net of hedges, of negative $2.2 billion and positive $0.1 billion in009 and 2008, respectively), with growth being driven by derivatives, convertibles, and equity trading. Investment banking revenues grew $1.5
illion, from $3.3 billion to $4.8 billion, primarily from increases in debt and equity underwriting activities reflecting higher transaction volumes
rom depressed 2008 levels. These increases were partially offset by decreases in lending revenues and CVA. Lending revenues decreased by $7.3
illion, from $4.8 billion to negative $2.5 billion, primarily from losses on credit default swap hedges. CVA decreased from $0.9 billion to negative
2.0 billion, mainly due to the narrowing of Citigroup spreads throughout 2009.
Operating expenses decreased 17%, or $2.8 billion. Excluding the 2008 repositioning and restructuring charges and a 2009 litigation reserve
elease, operating expenses declined 9%, or $1.4 billion, mainly as a result of headcount reductions and benefits from expense management.
Provisions for loan losses and for benefits and claims decreased 12%, or $232 million, to $1.8 billion, mainly due to lower credit reserve builds
nd net credit losses, due to an improved credit environment, particularly in the latter part of 2009.
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TRANSACTION SERVICES
Transaction Services is composed of Treasury and Trade Solutions (TTS) and Securities and Fund Services (SFS). TTS provides comprehensive cash
management and trade finance and services for corporations, financial institutions and public sector entities worldwide. SFS provides securities
ervices to investors, such as global asset managers, custody and clearing services to intermediaries such as broker- dealers, and depository and
gency/trust services to multinational corporations and governments globally. Revenue is generated from net interest revenue on deposits in TTS andFS, as well as from trade loans and fees for transaction processing and fees on assets under custody and administration in SFS.
% Change % Change
n millions of dollars 2010 2009 20082010 vs.
20092009 vs.
2008
et interest revenue $ 5,649 $5,651 $5,485 3%
on- interest revenue 4,385 4,138 4,461 6% (7)
otal revenues, net of interest expense $10,034 $9,789 $9,946 3% (2)%
otal operating expenses 4,868 4,515 5,156 8 (12)rovisions (releases) for credit losses and for benefits andaims (59) 7 35 NM (80)
ncome before taxes and noncontrolling interests $ 5,225 $5,267 $4,755 (1)% 11%
ncome taxes 1,551 1,531 1,402 1 9
ncome from continuing operations 3,674 3,736 3,353 (2) 11
et income attributable to noncontrolling interests 21 13 31 62 (58)et income $ 3,653 $3,723 $3,322 (2)% 12%
verage assets (in billions of dollars) $ 71 $ 60 $ 71 18% (15)%
Return on assets 5.15% 6.21% 4.69%
Revenues by region
North America $ 2,483 $2,526 $2,161 (2)% 17%
EMEA 3,356 3,389 3,677 (1) (8)
Latin America 1,490 1,373 1,439 9 (5)
Asia 2,705 2,501 2,669 8 (6)
otal revenues $10,034 $9,789 $9,946 3% (2)%
ncome from continuing operations by region
North America $ 544 $ 615 $ 323 (12)% 90%
EMEA 1,224 1,287 1,246 (5) 3
Latin America 653 604 588 8 3
Asia 1,253 1,230 1,196 2 3
otal net income from continuing operations $ 3,674 $3,736 $3,353 (2)% 11%
Key indicators (in billions of dollars)
verage deposits and other customer liability balances $ 333 $ 304 $ 281 10% 8%
OP assets under custody (in trillions of dollars) 12.6 12.1 11.0 4 10
M Not meaningful
010 vs. 2009
Revenues, net of interest expense, grew 3% compared to 2009, reflecting a strong year despite a low interest rate environment, driven by growth in
oth the TTS and SFS businesses. TTS revenues grew 2% as a result of increased customer liability balances and solid growth in trade and fees,
artially offset by spread compression. SFS revenues improved by 3% on higher volumes and balances reflecting the impact of sales and increased
market activity.
Average deposits and other customer liability balances grew 10%, driven by strong growth in the emerging markets.
Operating expenses grew 8% due to investment spending and higher business volumes.
Provisions for credit losses and for benefits and claims declined as compared to 2009, attributable to overall improvement in portfolio quality.
009 vs. 2008
Revenues, net of interest expense declined 2% compared to 2008 as strong growth in balances was more than offset by lower spreads driven by low
nterest rates and reduced securities asset valuations globally. TTS revenues grew 7% as a result of strong growth in balances and higher trade
evenues. SFS revenues declined 18%, attributable to reductions in asset valuations and volumes.
Average deposits and other customer liability balances grew 8%, driven by strong growth in all regions.
Operating expenses declined 12%, mainly as a result of benefits from expense management and re- engineering initiatives.
Provisions for credit losses and for benefits and claims declined 80%, primarily attributable to overall portfolio management.
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25
CITI HOLDINGS
Citi Holdings contains businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp businesses. Consistent withs strategy, Citi intends to exit these businesses as quickly as practicable in an economically rational manner through business divestitures, portfolioun- offs and asset sales. During 2009 and 2010, Citi made substantial progress divesting and exiting businesses from Citi Holdings, having
ompleted more than 30 divestiture transactions, including Smith Barney, Nikko Cordial Securities, Nikko Asset Management, Primerica Financial
ervices, various credit card businesses (including Diners Club North America) and The Student Loan Corporation (which is reported as discontinued
perations within the Corporate/Other segment for the second half of 2010 only). Citi Holdings GAAP assets of $359 billion have been reduced by
128 billion from December 31, 2009, and $468 billion from the peak in the first quarter of 2008. Citi Holdings GAAP assets of $359 billion
epresent approximately 19% of Citis assets as of December 31, 2010. Citi Holdings risk- weighted assets of approximately $330 billion represent
pproximately 34% of Citis risk- weighted assets as of December 31, 2010.
Citi Holdings consists of the following: Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool.
% Change % Change
n millions of dollars 2010 2009 2008
2010 vs.
2009
2009 vs.
2008
et interest revenue $14,773 $ 16,139 $ 21,092 (8)% (23)%
on- interest revenue 4,514 12,989 (29,330) (65) NM
otal revenues, net of interest expense $19,287 $ 29,128 $ (8,238) (34)% NMrovisions for credit losses and for benefits andlaims
et credit losses $19,070 $ 24,585 $ 14,026 (22)% 75%
Credit reserve build (release) (3,500) 5,305 11,258 NM (53)
rovision for loan losses $15,570 $ 29,890 $ 25,284 (48)% 18%
rovision for benefits and claims 813 1,094 1,228 (26) (11)
rovision (release) for unfunded lending commitments (82) 106 (172) NM NMotal provisions for credit losses and for benefits and
aims $16,301 $ 31,090 $ 26,340 (48)% 18%otal operating expenses $ 9,563 $ 13,764 $ 24,104 (31) (43)%
oss from continuing operations before taxes $(6,577) $(15,726) $(58,682) 58% 73%
enefits for income taxes (2,554) (6,878) (22,185) 63 69
Loss) from continuing operations $(4,023) $ (8,848) $(36,497) 55% 76%
et income (loss) attributable to noncontrolling interests 207 29 (372) NM NM
Citi Holdings net loss $(4,230) $ (8,877) $(36,125) 52% 75%
Balance sheet data (in billions of dollars)
otal EOP assets $ 359 $ 487 $ 650 (26)% (25)%
otal EOP deposits $ 79 $ 89 $ 81 (11)% 10%
M Not meaningful
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BROKERAGE AND ASSET MANAGEMENTBrokerage and Asset Management (BAM), which constituted approximately 8% of Citi Holdings by assets as of December 31, 2010, consists of
Citis global retail brokerage and asset management businesses. This segment was substantially reduced in size due to the sale in 2009 of SmithBarney to the Morgan Stanley Smith Barney joint venture (MSSB JV) and of Nikko Cordial Securities (reported as discontinued operations within
Corporate/Other for all periods presented). At December 31, 2010, BAM had approximately $27 billion of assets, primarily consisting of Citis
nvestment in, and assets related to, the MSSB JV. Morgan Stanley has options to purchase Citis remaining stake in the MSSB JV over three years
tarting in 2012.
% Change % Changen millions of dollars 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
et interest revenue $(277) $ 390 $ 1,280 NM (70)%
on- interest revenue 886 14,233 6,683 (94)% NM
otal revenues, net of interest expense $ 609 $14,623 $ 7,963 (96)% 84%
otal operating expenses $ 951 $ 3,141 $ 8,973 (70)% (65)%
Net credit losses $ 17 $ 1 $ 9 NM (89)%
Credit reserve build (release) (18) 36 8 NM NM
Provision for unfunded lending commitments (6) (5) (20)%
Provision (release) for benefits and claims 38 40 36 (5) 11
rovisions for credit losses and for benefits and claims $ 31 $ 72 $ 53 (57)% 36%
ncome (loss) from continuing operations before taxes $(373) $11,410 $(1,063) NM NM
ncome taxes (benefits) (170) 4,473 (212) NM NM
ncome (loss) from continuing operations $(203) $ 6,937 $ (851) NM NM
et income attributable to noncontrolling interests 11 12 (179) (8)% NM
et income (loss) $(214) $ 6,925 $ (672) NM NMOP assets reflecting the sale of Nikko Cordialecurities
(in billions of dollars) $ 27 $ 30 $ 31 (10)% (3)%
OP deposits (in billions of dollars) 58 60 58 (3) 3
M Not meaningful
010 vs. 2009
Revenues, net of interest expense decreased 96% versus the prior year mainly driven by the absence of the $11.1 billion pretax gain on sale ($6.7illion after tax) related to the MSSB JV transaction in the second quarter of 2009 and a $320 million pretax gain on the sale of the managed futures
usiness to the MSSB JV in the third quarter of 2009. Excluding these gains, revenue decreased primarily due to the absence of Smith Barney from
May 2009 onwards and the absence of Nikko Asset Management, partially offset by higher revenues from the MSSB JV and an improvement in
marks in Retail Alternative Investments.
Operating expenses decreased 70% from the prior year, mainly driven by the absence of Smith Barney from May 2009 onwards, lower MSSB JV
eparation- related costs and the absence of Nikko and Colfondos, partially offset by higher legal settlements and reserves associated with Smith
Barney.
Provisions for credit losses and for benefits and claims decreased 57%, mainly due to the absence of credit reserve builds.
Assets decreased 10% versus the prior year, mostly driven by the sales of the Citi private equity business and the run- off of tailored loan
ortfolios.
009 vs. 2008
Revenues, net of interest expense increased 84% versus the prior year mainly driven by the gain on sale related to the MSSB JV transaction and the
ain on the sale of the managed futures business to the MSSB JV. Excluding these gains, revenue decreased primarily due to the absence of SmithBarney from May 2009 onwards and the absence of 2009 fourth- quarter revenue of Nikko Asset Management, partially offset by an improvement in
marks in Retail Alternative Investments. Revenues in 2008 included a $347 million pretax gain on the sale of CitiStreet and charges related to the
ettlement of auction rate securities of $393 million pretax.
Operating expenses decreased 65% from 2008, mainly driven by the absence of Smith Barney and Nikko Asset Management expenses, re-
ngineering efforts and the absence of 2008 one- time expenses ($0.9 billion intangible impairment, $0.2 billion of restructuring and $0.5 billion of
write- downs and other charges).
Provisions for credit losses and for benefits and claims increased 36%, mainly reflecting an increase in reserve builds of $28 million.
Assets decreased 3% versus the prior year, mostly driven by the impact of the sale of Nikko Asset Management.
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LOCAL CONSUMER LENDINGLocal Consumer Lending (LCL), which constituted approximately 70% of Citi Holdings by assets as of December 31, 2010, includes a portion of
Citigroups North American mortgage business, retail partner cards, Western European cards and retail banking, CitiFinancial North America and
ther local Consumer finance businesses globally. The Student Loan Corporation is reported as discontinued operations within the Corporate/Other
egment for the second half of 2010 only. At December 31, 2010, LCL had $252 billion of assets ($226 billion in North America). Approximately
129 billion of assets in LCL as of December 31, 2010 consisted of U.S. mortgages in the Companys CitiMortgage and CitiFinancial operations.
The North American assets consist of residential mortgage loans (first and second mortgages), retail partner card loans, personal loans, commercialeal estate (CRE), and other consumer loans and assets.
% Change % Change
n millions of dollars 2010 2009 20082010 vs.
20092009 vs.
2008
et interest revenue $13,831 $ 12,995 $ 17,136 6% (24)%
on- interest revenue 1,995 4,770 6,362 (58) (25)
otal revenues, net of interest expense $15,826 $ 17,765 $ 23,498 (11)% (24)%
otal operating expenses $ 8,064 $ 9,799 $ 14,238 (18)% (31)%
Net credit losses $17,040 $ 19,185 $ 13,111 (11)% 46%
Credit reserve build (release) (1,771) 5,799 8,573 NM (32)
Provision for benefits and claims 775 1,054 1,192 (26) (12)
Provision for unfunded lending commitments
rovisions for credit losses and for benefits andaims $16,044 $ 26,038 $ 22,876 (38)% 14%
Loss) from continuing operations before taxes $ (8,282) $(18,072) $(13,616) 54% (33)%
enefits for income taxes (3,289) (7,656) (5,259) 57 (46)
Loss) from continuing operations $ (4,993) $(10,416) $ (8,357) 52% (25)%
et income attributable to noncontrolling interests 8 33 12 (76) NM
et (loss) $ (5,001) $(10,449) $ (8,369) 52% (25)%
verage assets (in billions of dollars) $ 324 $ 351 $ 420 (8)% (16)et credit losses as a percentage of average
oans 6.20% 6.38% 3.80%
M Not meaningful
010 vs. 2009Revenues, net of interest expense decreased 11% from the prior year. Net interest revenue increased 6% due to the adoption of SFAS 166/167,
artially offset by the impact of lower balances due to portfolio run- off and asset sales. Non- interest revenue declined 58%, primarily due to the
bsence of the $1.1 billion gain on the sale of Redecard in the first quarter of 2009 and a higher mortgage repurchase reserve charge.
Operating expenses decreased 18%, primarily due to the impact of divestitures, lower volumes, re- engineering actions and the absence of costs
ssociated with the U.S. government loss- sharing agreement, which was exited in the fourth quarter of 2009.
Provisions for credit losses and for benefits and claims decreased 38%, reflecting a net $1.8 billion credit reserve release in 2010 compared to a
5.8 billion build in 2009. Lower net credit losses across most businesses were partially offset by the impact of the adoption of SFAS 166/167. On a
omparable basis, net credit losses were lower year- over- year, driven by improvement in U.S. mortgages, international portfolios and retail partner
ards.
Assets declined 21% from the prior year, primarily driven by portfolio run- off, higher loan loss reserve balances, and the impact of asset sales
nd divestitures, partially offset by an increase of $41 billion resulting from the adoption of SFAS 166/167. Key divestitures in 2010 included The
tudent Loan Corporation, Primerica, auto loans, the Canadian Mastercard business and U.S. retail sales finance portfolios.
009 vs. 2008
Revenues, net of interest expense decreased 24% from the prior year. Net interest revenue was 24% lower than the prior year, primarily due to lower
alances, de- risking of the portfolio, and spread compression. Non- interest revenue decreased $1.6 billion, mostly driven by the impact of higher
redit losses flowing through the securitization trusts, partially offset by the $1.1 billion gain on the sale of Redecard in the first quarter of 2009.
Operating expenses declined 31% from the prior year, due to lower volumes and reductions from expense re- engineering actions, and the impact
f goodwill write- offs of $3.0 billion in the fourth quarter of 2008, partially offset by higher costs associated with delinquent loans.
Provisions for credit losses and for benefits and claims increased 14% from the prior year, reflecting an increase in net credit losses of $6.1
illion, partially offset by lower reserve builds of $2.8 billion. Higher net credit losses were primarily driven by higher losses of $3.6 billion in
esidential real estate lending, $1.0 billion in retail partner cards, and $0.7 billion in international.
Assets decreased $57 billion from the prior year, primarily driven by lower originations, wind- down of specific businesses, asset sales,
ivestitures, write- offs and higher loan loss reserve balances. Key divestitures in 2009 included the FI credit card business, Italy Consumer finance,
Diners Europe, Portugal cards, Norway Consumer and Diners Club North America.
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apan Consumer Finance
Citigroup continues to actively monitor a number of matters involving its Japan Consumer Finance business, including customer refund claims and
efaults, as well as financial and legislative, regulatory, judicial and other political developments, relating to the charging of gray zone interest. Gray
one interest represents interest at rates that are legal but for which claims may not be enforceable. Although Citi determined in 2008 to exit its Japan
Consumer Finance business and has been liquidating its portfolio and otherwise winding down the business, this business has incurred, and willontinue to face, net credit losses and refunds, due in part to legislative, regulatory and judicial actions taken in recent years. These actions may also
educe credit availability and increase potential claims and losses relating to gray zone interest.In September 2010, one of Japans largest consumer finance companies (Takefuji) declared bankruptcy and is currently in the process of
estructuring, with court protection and assistance. Citi believes this action reflects the financial distress that Japan's top consumer finance lenders are
acing as they continue to deal with liabilities for gray zone interest refund claims. During 2010, LCL recorded a charge of approximately $325
million (pretax) to increase its reserves related to customer refunds in the Japan Consumer Finance business.
Citi continues to monitor and evaluate these developments and the potential impact to both currently and previously outstanding loans in this
usiness, and its reserves related thereto. However, the trend in the type, number and amount of claims, and the potential full amount