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Exhibit 99.1

 

For Immediate Release

GRAPHIC

Citigroup Inc. (NYSE: C)

January 17, 2013

 

 

CITIGROUP REPORTS FOURTH QUARTER 2012 EARNINGS PER SHARE OF $0.38;

$0.69 EXCLUDING CVA/DVA(1) AND REPOSITIONING CHARGES(2)

 

FOURTH QUARTER NET INCOME OF $1.2 BILLION;

$2.2 BILLION EXCLUDING CVA/DVA AND REPOSITIONING CHARGES

 

FOURTH QUARTER REVENUES OF $18.2 BILLION; $18.7 BILLION EXCLUDING CVA/DVA

 

FOURTH QUARTER NET INTEREST MARGIN EXPANDED TO 2.93%

 

FOURTH QUARTER RESULTS INCLUDED $1.3 BILLION OF LEGAL AND RELATED EXPENSES

 

FOURTH QUARTER NET CREDIT LOSSES OF $3.1 BILLION DECLINED 25% VERSUS PRIOR YEAR PERIOD

 

FOURTH QUARTER LOAN LOSS RESERVE RELEASE OF $86 MILLION VERSUS $1.5 BILLION IN PRIOR YEAR PERIOD

 

BASEL I TIER 1 COMMON RATIO OF 12.7%

ESTIMATED BASEL III TIER 1 COMMON RATIO INCREASED TO 8.7%(3)

 

CITIGROUP DEPOSITS OF $931 BILLION GREW 7% VERSUS PRIOR YEAR PERIOD

 

CITICORP LOANS OF $540 BILLION GREW 7% VERSUS PRIOR YEAR PERIOD

 

CITI HOLDINGS ASSETS OF $156 BILLION DECLINED 31% FROM PRIOR YEAR PERIOD
AND REPRESENTED 8% OF TOTAL CITIGROUP ASSETS AT YEAR END 2012

 

New York, January 17, 2013 — Citigroup Inc. today reported net income for the fourth quarter 2012 of $1.2 billion, or $0.38 per diluted share, on revenues of $18.2 billion. This compared to net income of $956 million, or $0.31 per diluted share, on revenues of $17.2 billion for the fourth quarter 2011.

 

CVA/DVA was a negative $485 million in the fourth quarter, mainly resulting from the improvement in Citigroup’s credit spreads, compared to negative $40 million in the prior year period.  Fourth quarter 2012 results also included the previously announced $1.0 billion of repositioning charges ($653 million after-tax), compared to $428 million of repositioning charges ($275 million after-tax) in the prior year period. Excluding CVA/DVA, fourth quarter revenues were $18.7 billion, up 8% from the prior year period. Excluding CVA/DVA and repositioning charges, earnings were $0.69 per diluted share, up 68% from the prior year period, as higher revenues, lower core operating expenses and lower net credit losses were partially offset by higher legal and related expenses and a lower net loan loss reserve release.

 

Michael Corbat, Citigroup’s Chief Executive Officer, said, “Our bottom line earnings reflect an environment that remains challenging- with businesses working through issues like spread compression and regulatory changes- as well as the costs of putting legacy issues behind us. However, we did make progress on several fronts. At 8.7%, we reached the target for our year-end Basel III Tier 1 Common ratio. We continue to have a very liquid balance sheet and a high-quality credit portfolio in our core businesses. It will take some time to work through the

 

1



 

challenges of the current environment but realizing core earnings potential, as well as improving our returns on assets and tangible equity, are critical goals going forward.”

 

Citigroup full year 2012 net income was $7.5 billion on revenues of $70.2 billion, compared to net income of $11.1 billion on revenues of $78.4 billion for the full year 2011. Full year 2012 results included negative $2.3 billion in CVA/DVA, compared to positive $1.8 billion in the prior year. Citigroup’s full year 2012 results also included a loss of $4.6 billion ($2.9 billion after-tax) related to the sale of minority investments(4), versus a gain of $199 million ($128 million after-tax) in the prior year. In addition to the fourth quarter 2012 repositioning charges of $1.0 billion, Citigroup recorded a $582 million tax benefit(5) related to the resolution of certain tax audit items in the third quarter 2012. Excluding CVA/DVA and the impact of minority investments, Citigroup revenues were $77.1 billion in 2012, up slightly compared to $76.3 billion in the prior year. Excluding these items as well as the repositioning charges in the fourth quarters of 2012 and 2011 and the tax item in the third quarter of 2012, net income was $11.9 billion in 2012, up 18% compared to 2011, as higher revenues, lower core operating expenses and lower net credit losses were partially offset by higher legal and related expenses and a lower net loan loss reserve release in 2012 compared to 2011.

 

Citigroup revenues of $18.7 billion in the fourth quarter 2012, excluding CVA/DVA, increased 8% from the prior year period, driven by 9% growth in Citicorp revenues and a 2% decline in Citi Holdings revenues primarily resulting from the ongoing wind down of Citi Holdings assets.

 

Citicorp revenues(6) of $17.1 billion in the fourth quarter 2012 included $(510) million of CVA/DVA reported within Securities and Banking.  Excluding CVA/DVA, Citicorp revenues were $17.6 billion, an increase of 9% from the prior year period with growth reported in each of the three operating businesses within Citicorp. Securities and Banking revenues grew 47% (excluding CVA/DVA), Global Consumer Banking (GCB) revenues grew 4% and Transaction Services revenues grew 1% from the prior year period.

 

Citi Holdings revenues of $1.1 billion in the fourth quarter 2012 included positive $25 million of CVA/DVA. Excluding CVA/DVA, Citi Holdings revenues were $1.0 billion, down 2% versus the prior year period.  Local Consumer Lending drove the decline in Citi Holdings revenues from the prior year period, due to the ongoing reduction in assets.  Most of the decline in Local Consumer Lending revenues was offset by higher revenues in the Special Asset Pool reflecting an improvement in asset marks.  Total Citi Holdings assets of $156 billion declined $69 billion, or 31%, from the fourth quarter 2011.  Citi Holdings assets at the end of the fourth quarter 2012 represented approximately 8% of total Citigroup assets.

 

Citigroup’s net income rose to $1.2 billion in the fourth quarter 2012 from $956 million in the prior year period.  Excluding the impact of CVA/DVA and repositioning charges, Citigroup net income was $2.2 billion, 72% higher than the fourth quarter 2011.  Operating expenses of $13.8 billion were 5% higher than the prior year period reflecting the higher repositioning charges and higher legal and related costs, including the previously announced $305 million charge in the fourth quarter 2012 related to the agreement in principle reached with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board regarding the independent foreclosure review process.  Citigroup’s cost of credit in the fourth quarter 2012 was $3.2 billion, an increase of 11% over the prior year period, reflecting a $1.4 billion decrease in net loan loss reserve releases offset by a $1.0 billion improvement in net credit losses.  Citigroup’s provision for income taxes was a benefit of $206 million in the fourth quarter 2012, compared to an expense of $91 million in the prior year period.

 

Citigroup’s allowance for loan losses was $25.5 billion at year end, or 3.9% of total loans, compared to $30.1 billion, or 4.7% of total loans, in the prior year period.  The $86 million net release of loan loss reserves in the quarter compared to a $1.5 billion release in the prior year period.  Reserve releases in Citicorp of $137 million compared to $805 million in the fourth quarter 2011, predominantly reflecting lower releases in North America GCB, largely related to Citi-branded cards.  Citi Holdings recorded a net loan loss reserve build of $51 million in the fourth quarter 2012, compared to a net reserve release of $633 million in the prior year period, as a significantly lower net reserve release of $49 million was more than offset by losses on loan sales of $100 million. Citigroup asset quality remained largely stable to improving in the fourth quarter 2012.  Corporate non-accrual loans decreased 28% to $2.3 billion from the fourth quarter 2011, while consumer non-accrual loans grew 17% to $9.2 billion from the fourth quarter 2011, predominantly reflecting the third quarter 2012 OCC guidance regarding the treatment of mortgage loans where the borrower has gone through Chapter 7 bankruptcy which added $1.5

 

2



 

billion to consumer non-accrual loans.  Consumer loans that were 90+ days delinquent, excluding the Special Asset Pool, decreased 17% versus the prior year period to $7.7 billion, or 1.9% of consumer loans.

 

Citigroup’s capital levels and book value per share increased during 2012.  As of quarter end, book value per share was $61.57 and tangible book value per share(7) was $51.19, 1% and 3% increases respectively versus the prior year period.  Citigroup’s book value and tangible book value per share each declined 3% in the fourth quarter 2012 as compared to the third quarter 2012 due to the dilutive impact of the issuance of approximately 96 million shares of common stock during the quarter upon the automatic settlement of the T-DECS issued in December 2009, as previously announced.  At quarter end, Citigroup’s Tier 1 Capital Ratio was 14.1%, its Basel I Tier 1 Common Ratio was 12.7%, and its Basel III Tier 1 Common Ratio was estimated at 8.7%.

 

CITIGROUP

 

($ millions, except per share amounts)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citicorp

 

17,115

 

17,641

 

16,086

 

-3

%

6

%

71,006

 

72,082

 

Citi Holdings

 

1,059

 

(3,690

)

1,088

 

NM

 

-3

%

(833

)

6,271

 

Total Revenues

 

$

18,174

 

$

13,951

 

$

17,174

 

30

%

6

%

$

70,173

 

$

78,353

 

Total Revenues (Ex-CVA/DVA & Gain (Loss) on Minority Investments)

 

$

18,659

 

$

19,411

 

$

17,214

 

-4

%

8

%

$

77,134

 

$

76,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

13,845

 

$

12,220

 

$

13,211

 

13

%

5

%

$

50,518

 

$

50,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

3,066

 

3,979

 

4,108

 

-23

%

-25

%

14,576

 

20,038

 

Loan Loss Reserve Build/(Release) (a)

 

(86

)

(1,509

)

(1,468

)

94

%

94

%

(3,744

)

(8,214

)

Provision for Benefits and Claims

 

219

 

225

 

234

 

-3

%

-6

%

887

 

972

 

Total Cost of Credit

 

$

3,199

 

$

2,695

 

$

2,874

 

19

%

11

%

$

11,719

 

$

12,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from Cont. Ops. Before Taxes

 

$

1,130

 

$

(964

)

$

1,089

 

NM

 

4

%

$

7,936

 

$

14,624

 

Provision for Income Taxes

 

(206

)

(1,488

)

91

 

86

%

NM

 

27

 

3,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

1,336

 

$

524

 

$

998

 

NM

 

34

%

$

7,909

 

$

11,103

 

Net income (loss) from Disc. Ops.

 

(112

)

(31

)

0

 

NM

 

—

 

(149

)

112

 

Non-Controlling Interest

 

28

 

25

 

42

 

12

%

-33

%

219

 

148

 

Citigroup Net Income

 

$

1,196

 

$

468

 

$

956

 

NM

 

25

%

$

7,541

 

$

11,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Ex-CVA/DVA, Gain (Loss) on Minority Investments & 4Q Repositioning) (b)

 

$

2,150

 

$

3,268

 

$

1,253

 

-34

%

72

%

$

11,921

 

$

10,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Common Ratio

 

12.7

%

12.7

%

11.8

%

 

 

 

 

 

 

 

 

Tier 1 Capital Ratio

 

14.1

%

13.9

%

13.6

%

 

 

 

 

 

 

 

 

Return on Common Equity

 

2.5

%

1.0

%

2.1

%

 

 

 

 

 

 

 

 

Book Value per Share(c)

 

$

61.57

 

$

63.59

 

$

60.70

 

 

 

 

 

 

 

 

 

Tangible Book Value per Share(c)

 

$

51.19

 

$

52.69

 

$

49.74

 

 

 

 

 

 

 

 

 

 


Note:  Please refer to the Appendices and Footnotes at the end of this press release for additional information.

(a) Includes provision for unfunded lending commitments.

(b) 3Q’12 also excludes a tax benefit related to the resolution of certain tax audit items.

(c) Book value and tangible book value per share each declined in the fourth quarter 2012 compared to the third quarter of 2012 due to the dilutive impact of the issuance of approximately 96 million shares of common stock during the quarter upon the automatic settlement of the T-DECS issued in December 2009, as previously announced.

 

3



 

CITICORP

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

10,249

 

10,180

 

9,885

 

1

%

4

%

40,214

 

39,195

 

Securities and Banking

 

4,293

 

4,770

 

3,194

 

-10

%

34

%

19,743

 

21,423

 

Transaction Services

 

2,649

 

2,658

 

2,624

 

—

 

1

%

10,857

 

10,579

 

Corporate/Other

 

(76

)

33

 

383

 

NM

 

NM

 

192

 

885

 

Total Revenues

 

$

17,115

 

$

17,641

 

$

16,086

 

-3

%

6

%

$

71,006

 

$

72,082

 

Total Revenues (Ex-CVA/DVA and Gain (Loss) on Minority Investments)

 

$

17,625

 

$

18,440

 

$

16,160

 

-4

%

9

%

$

73,440

 

$

70,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

12,238

 

$

11,030

 

$

11,356

 

11

%

8

%

$

45,265

 

$

44,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

2,094

 

2,172

 

2,596

 

-4

%

-19

%

8,734

 

11,462

 

Loan Loss Reserve Build/(Release) (a)

 

(137

)

(696

)

(805

)

-80

%

-83

%

(2,137

)

(4,896

)

Provision for Benefits and Claims

 

64

 

65

 

46

 

-2

%

39

%

236

 

193

 

Total Cost of Credit

 

$

2,021

 

$

1,541

 

$

1,837

 

31

%

10

%

$

6,833

 

$

6,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

2,251

 

$

4,030

 

$

2,271

 

-44

%

-1

%

$

14,104

 

$

15,289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

7,372

 

7,464

 

6,432

 

-1

%

15

%

29,749

 

30,161

 

EMEA

 

2,619

 

2,759

 

2,425

 

-5

%

8

%

11,509

 

12,265

 

LATAM

 

3,669

 

3,668

 

3,342

 

—

 

10

%

14,518

 

13,552

 

Asia

 

3,531

 

3,717

 

3,504

 

-5

%

1

%

15,038

 

15,219

 

Corporate/Other

 

(76

)

33

 

383

 

NM

 

NM

 

192

 

885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

1,256

 

1,659

 

568

 

-24

%

NM

 

6,252

 

5,583

 

EMEA

 

391

 

616

 

417

 

-37

%

-6

%

2,491

 

3,143

 

LATAM

 

816

 

925

 

706

 

-12

%

16

%

3,478

 

3,192

 

Asia

 

736

 

924

 

635

 

-20

%

16

%

3,742

 

3,960

 

Corporate/Other

 

(948

)

(94

)

(55

)

NM

 

NM

 

(1,859

)

(589

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EOP Assets ($B)

 

1,709

 

1,760

 

1,649

 

-3

%

4

%

 

 

 

 

EOP Loans ($B)

 

540

 

537

 

507

 

1

%

7

%

 

 

 

 

EOP Deposits ($B)

 

863

 

878

 

804

 

-2

%

7

%

 

 

 

 

 


Note:  Please refer to the Appendices and Footnotes at the end of this press release for additional information.

(a) Includes provision for unfunded lending commitments.

 

Citicorp

 

Citicorp revenues of $17.1 billion in the fourth quarter 2012 increased by 6% from the prior year period.  CVA/DVA, reported within Securities and Banking, was $(510) million in the fourth quarter 2012, compared to $(74) million in the prior year period.  Excluding CVA/DVA, revenues were $17.6 billion, up 9% from the fourth quarter 2011 driven by 47% growth in Securities and Banking revenues to $4.8 billion, 4% growth in GCB revenues to $10.2 billion and 1% growth in Transaction Services revenues to $2.6 billion.  Corporate/Other revenues declined $459 million from the prior year period to $(76) million, mainly driven by the absence of hedging gains in the prior year period and lower investment yields.

 

Citicorp net income decreased slightly from the prior year period to $2.3 billion, as revenue growth and lower net credit losses were offset by CVA/DVA, the higher repositioning costs and lower net loan loss reserve releases.  Excluding CVA/DVA and the repositioning charges, Citicorp net income of $3.2 billion was up 24% versus the prior year period.

 

Citicorp operating expenses increased 8% from the prior year period to $12.2 billion, largely reflecting the repositioning charges ($951 million in the fourth quarter 2012 versus $368 million in the prior year period) and higher legal and related expenses.

 

4



 

Citicorp cost of credit of $2.0 billion in the fourth quarter 2012 increased 10% from the prior year period.  The increase reflected lower loan loss reserve releases, which declined $668 million, partially offset by lower net credit losses, which declined 19% to $2.1 billion compared to the prior year period.  The decline in reserve releases was largely in North America GCB and primarily related to Citi-branded cards.  Citicorp’s consumer loans 90+ days delinquent declined 10% from the prior year period to $3.1 billion, and the 90+ days delinquency ratio decreased 14 basis points to 1.05% of loans.

 

Citicorp end of period loans grew 7% versus the prior year period to $540 billion, reflecting strong growth in corporate loans and Latin America consumer loans.  Consumer loans grew 3% to $295 billion and corporate loans grew 11% to $244 billion, both versus the prior year period.

 

Global Consumer Banking

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

5,346

 

5,402

 

5,167

 

-1

%

3

%

21,081

 

20,159

 

EMEA

 

391

 

381

 

348

 

3

%

12

%

1,516

 

1,558

 

LATAM

 

2,520

 

2,419

 

2,350

 

4

%

7

%

9,702

 

9,469

 

Asia

 

1,992

 

1,978

 

2,020

 

1

%

-1

%

7,915

 

8,009

 

Total Revenues

 

$

10,249

 

$

10,180

 

$

9,885

 

1

%

4

%

$

40,214

 

$

39,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

5,907

 

$

5,389

 

$

5,578

 

10

%

6

%

$

21,819

 

$

21,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

2,020

 

2,030

 

2,423

 

—

 

-17

%

8,452

 

10,840

 

Loan Loss Reserve Build/(Release) (a)

 

(147

)

(521

)

(713

)

72

%

79

%

(2,131

)

(4,426

)

Provision for Benefits and Claims

 

64

 

65

 

45

 

-2

%

42

%

237

 

192

 

Total Cost of Credit

 

$

1,937

 

$

1,574

 

$

1,755

 

23

%

10

%

$

6,558

 

$

6,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

1,762

 

$

2,161

 

$

1,722

 

-18

%

2

%

$

8,101

 

$

7,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

1,002

 

1,299

 

944

 

-23

%

6

%

4,814

 

4,095

 

EMEA

 

(38

)

8

 

(1

)

NM

 

NM

 

(22

)

95

 

LATAM

 

401

 

405

 

369

 

-1

%

9

%

1,512

 

1,578

 

Asia

 

397

 

449

 

410

 

-12

%

-3

%

1,797

 

1,904

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in billions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avg. Cards Loans

 

145

 

145

 

148

 

—

 

-2

%

 

 

 

 

Avg. Retail Banking Loans

 

145

 

141

 

131

 

2

%

10

%

 

 

 

 

Avg. Deposits

 

328

 

324

 

313

 

1

%

5

%

 

 

 

 

Investment Sales

 

23

 

24

 

16

 

-2

%

41

%

 

 

 

 

Cards Purchase Sales

 

97

 

90

 

95

 

8

%

2

%

 

 

 

 

 


Note:  Please refer to the Appendices and Footnotes  at the end of this press release for additional information.

(a) Includes provision for unfunded lending commitments.

 

Global Consumer Banking

 

GCB revenues of $10.2 billion grew 4% from the prior year period, reflecting volume growth across most businesses, partially offset by ongoing spread compression.  Revenues also benefited from higher U.S. mortgage revenues.  Revenues in international GCB grew 4% to $4.9 billion on a constant dollar basis (excluding the impact of foreign exchange translation into U.S. dollars; the impact of FX on international GCB results was not material in the fourth quarter 2012)(8) and grew 3% in North America GCB to $5.3 billion.

 

GCB net income rose 2% versus the prior year period (1% on a constant dollar basis) to $1.8 billion, reflecting growth in revenues and lower net credit losses, partially offset by lower loan loss reserve releases and higher operating expenses. Expenses of $5.9 billion rose 6% versus the prior year period driven by the higher repositioning charges ($366 million in the fourth quarter 2012 versus $65 million in the prior year period), as well as volume-related costs.

 

5



 

North America GCB revenues grew 3% to $5.3 billion driven by higher retail banking revenues that were partially offset by lower revenues from the cards businesses (Citi-branded cards and Citi retail services).  Retail banking revenues grew 20% to $1.7 billion from the fourth quarter 2011, primarily reflecting higher mortgage revenues due to increased retail originations and wider margins.  Citi-branded cards revenues declined 1% to $2.1 billion, and Citi retail services revenues declined 4% to $1.5 billion reflecting lower average loan balances as Citi-branded cards loans declined 4% and Citi retail services loans declined 3% versus the prior year period.  The decline in Citi retail services revenues also reflected improving credit trends and the related impact on contractual partner payments.

 

North America GCB net income was $1.0 billion, 6% higher than the fourth quarter 2011.  The growth in net income was largely driven by higher revenues and a $474 million decrease in net credit losses that were partially offset by a $569 million reduction in loan loss reserve releases versus the prior year period.  Operating expenses in the fourth quarter were flat versus the prior year period at $2.7 billion as efficiency savings broadly offset higher repositioning charges ($100 in the fourth quarter 2012 versus $18 in the prior year period).

 

North America GCB credit quality continued to improve as net credit losses decreased $474 million, or 27%, to $1.3 billion compared to the prior year period.  Net credit losses improved in Citi-branded cards (down 29% to $700 million), Citi retail services (down 25% to $514 million) and in retail banking (down 27% to $51 million) versus the prior year period. Delinquency rates improved in Citi-branded cards and Citi retail services versus the prior year period and ended 2012 at historically low levels.  The reserve release in the fourth quarter 2012 was $215 million, $569 million lower than in the fourth quarter 2011.

 

International GCB revenues grew 4% to $4.9 billion on a constant dollar basis versus the fourth quarter 2011, with 7% growth in Latin America to $2.5 billion, an 11% increase in EMEA to $391 million and a 2% decline in Asia to $2.0 billion, which reflected the continued low interest rate environment and regulatory changes in the region.

 

International GCB net income decreased 2% from the prior year period to $760 million, and declined by 4% on a constant dollar basis. Operating expenses in the fourth quarter 2012 increased 11% to $3.2 billion predominantly reflecting the increase in repositioning charges ($266 million in fourth quarter 2012 versus $47 million in the prior year period), as well as volume-related costs.

 

International GCB credit quality remained fairly stable even as loan portfolios continued to grow. Net credit losses rose 10% to $755 million, primarily reflecting portfolio growth as well as certain specific commercial loan charge-offs in Latin America.  Net credit losses increased 6 basis points versus the prior year period to 2.15% of average loans.

 

6



 

Securities and Banking

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Banking

 

996

 

926

 

638

 

8

%

56

%

3,641

 

3,310

 

Equity Markets

 

455

 

510

 

233

 

-11

%

95

%

2,418

 

2,402

 

Fixed Income Markets

 

2,710

 

3,697

 

1,716

 

-27

%

58

%

13,961

 

10,891

 

Lending

 

139

 

194

 

165

 

-28

%

-16

%

997

 

1,809

 

Private Bank

 

578

 

590

 

517

 

-2

%

12

%

2,314

 

2,138

 

Other Securities and Banking

 

(75

)

(348

)

(1

)

78

%

NM

 

(1,101

)

(859

)

Total Revenues (Ex-CVA / DVA)

 

$

4,803

 

$

5,569

 

$

3,268

 

-14

%

47

%

$

22,230

 

$

19,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVA/DVA

 

(510

)

(799

)

(74

)

36

%

NM

 

(2,487

)

1,732

 

Total Revenues

 

$

4,293

 

$

4,770

 

$

3,194

 

-10

%

34

%

$

19,743

 

$

21,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

3,676

 

$

3,486

 

$

3,736

 

5

%

-2

%

$

14,444

 

$

15,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

75

 

56

 

178

 

34

%

-58

%

168

 

602

 

Credit Reserve Build/(Release) (a)

 

3

 

(129

)

(109

)

NM

 

NM

 

(46

)

(486

)

Total Cost of Credit

 

$

78

 

$

(73

)

$

69

 

NM

 

13

%

$

122

 

$

116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

629

 

$

1,120

 

$

(158

)

-44

%

NM

 

$

4,384

 

$

4,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

1,391

 

1,439

 

660

 

-3

%

NM

 

6,104

 

7,558

 

EMEA

 

1,343

 

1,511

 

1,219

 

-11

%

10

%

6,417

 

7,221

 

LATAM

 

705

 

802

 

579

 

-12

%

22

%

3,019

 

2,370

 

Asia

 

854

 

1,018

 

736

 

-16

%

16

%

4,203

 

4,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Ops.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

163

 

232

 

(441

)

-30

%

NM

 

1,011

 

1,044

 

EMEA

 

131

 

346

 

160

 

-62

%

-18

%

1,354

 

2,000

 

LATAM

 

278

 

363

 

198

 

-23

%

40

%

1,308

 

974

 

Asia

 

75

 

190

 

(51

)

-61

%

NM

 

822

 

895

 

 


Note:  Please refer to the Appendices and Footnotes  at the end of this press release for additional information.

(a) Includes provision for unfunded lending commitments.

 

Securities and Banking

 

Securities and Banking revenues rose 34% from the prior year period to $4.3 billion.  Excluding the impact of the $(510) million of CVA/DVA in the fourth quarter 2012 (compared to $(74) million in the prior year period), Securities and Banking revenues were $4.8 billion, 47% higher than the prior year period.

 

Investment Banking revenues of $996 million increased 56% from the prior year period.  Debt underwriting revenues increased 62% to $632 million and equity underwriting revenues increased 78% to $160 million.  Advisory revenues of $204 million were 28% higher than the prior year period.  Overall, Citi gained wallet share during 2012 in most products and regions.

 

Equity Markets revenues of $455 million in the fourth quarter 2012 (excluding $(74) million of CVA/DVA) were 95% above the prior year period, driven by improved derivatives performance as well as the absence of proprietary trading losses in the prior year period.

 

Fixed Income revenues of $2.7 billion in the fourth quarter 2012 (excluding $(434) million of CVA/DVA) increased 58% from the prior year driven by significant improvement in credit and securitized products, as well as higher revenues in rates and currencies.

 

Lending revenues decreased 16% to $139 million from the prior year period, reflecting $258 million of mark-to-market losses on hedges related to accrual loans as credit spreads tightened during the fourth quarter 2012 (compared to a $174 million loss in the prior year period). Excluding the mark-to-market impact on hedges related

 

7



 

to accrual loans, lending revenues rose 17% to $397 million(9) versus the prior year period reflecting higher loan balances and improved spreads.

 

Private Bank revenues increased 12% to $578 million (excluding $(2) million of CVA/DVA) from the prior year period, with growth across all regions.

 

Securities and Banking net income was $629 million in the fourth quarter 2012. Excluding CVA/DVA, net income rose to $945 million from $(118) million in the prior year period, primarily reflecting the increase in revenues and a decline in operating expenses, driven by efficiency savings. Fourth quarter 2012 operating expenses included $237 million in repositioning charges, compared to $215 million in the prior year period. Excluding repositioning charges, operating expenses declined 2% from the prior year period.

 

Transaction Services

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury and Trade Solutions

 

1,993

 

1,991

 

1,965

 

—

 

1

%

8,150

 

7,697

 

Securities and Fund Services

 

656

 

667

 

659

 

-2

%

—

 

2,707

 

2,882

 

Total Revenues

 

$

2,649

 

$

2,658

 

$

2,624

 

—

 

1

%

$

10,857

 

$

10,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

1,597

 

$

1,391

 

$

1,530

 

15

%

4

%

$

5,788

 

$

5,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

—

 

87

 

(6

)

-100

%

100

%

114

 

17

 

Loan Loss Reserve Build/(Release) (a)

 

6

 

(46

)

19

 

NM

 

-68

%

40

 

19

 

Total Cost of Credit

 

$

6

 

$

41

 

$

13

 

-85

%

-54

%

$

154

 

$

36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

808

 

$

843

 

$

762

 

-4

%

6

%

$

3,478

 

$

3,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Deposits ($ in billions) (b)

 

$

428

 

$

415

 

$

369

 

3

%

16

%

$

404

 

$

364

 

EOP Assets Under Custody ($ in trillions)

 

$

13.2

 

$

12.8

 

$

12.0

 

3

%

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

635

 

623

 

605

 

2

%

5

%

2,564

 

2,444

 

EMEA

 

885

 

867

 

858

 

2

%

3

%

3,576

 

3,486

 

LATAM

 

444

 

447

 

413

 

-1

%

8

%

1,797

 

1,713

 

Asia

 

685

 

721

 

748

 

-5

%

-8

%

2,920

 

2,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Ops.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

100

 

120

 

68

 

-17

%

47

%

470

 

415

 

EMEA

 

314

 

283

 

283

 

11

%

11

%

1,244

 

1,130

 

LATAM

 

134

 

157

 

139

 

-15

%

-4

%

654

 

639

 

Asia

 

265

 

286

 

277

 

-7

%

-4

%

1,127

 

1,165

 

 


(a) Includes provision for unfunded lending commitments.

(b) Average deposits and other customer liability balances.

 

Transaction Services

 

Transaction Services revenues were $2.6 billion, up 1% from the prior year period which reflected 1% growth in Treasury and Trade Solutions (TTS) revenues to $2.0 billion, with Securities and Fund Services (SFS) revenues broadly flat at $656 million. TTS revenues increased as the growth in average assets, particularly trade loans, and deposits continued to be partially offset by ongoing spread compression.  SFS revenues remained flat as spread compression was offset by fee revenue growth driven by higher volumes.

 

Transaction Services net income of $808 million increased 6% from the fourth quarter 2011, reflecting the 1% revenue increase and a lower tax rate, partially offset by a 4% increase in operating expenses. Fourth quarter 2012 operating expenses included $95 million in repositioning charges, compared to $54 million in the prior year period.  Excluding repositioning charges, operating expenses grew 2% from the prior year period due to higher legal and related costs and episodic items.

 

8



 

Transaction Services average deposits and other customer liability balances grew 16% versus the prior year period to $428 billion.  Assets under custody increased 10% from the fourth quarter 2011 to $13.2 trillion.

 

CITI HOLDINGS

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

QoQ%

 

YoY%

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Asset Management

 

64

 

(4,804

)

43

 

NM

 

49

%

(4,699

)

282

 

Local Consumer Lending

 

1,005

 

1,104

 

1,279

 

-9

%

-21

%

4,366

 

5,442

 

Special Asset Pool

 

(10

)

10

 

(234

)

NM

 

96

%

(500

)

547

 

Total Revenues

 

$

1,059

 

$

(3,690

)

$

1,088

 

NM

 

-3

%

$

(833

)

$

6,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues (Ex-CVA / DVA & Gain (Loss) on Minority Investments)

 

$

1,034

 

$

971

 

$

1,054

 

6

%

-2

%

$

3,694

 

$

6,197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

$

1,607

 

$

1,190

 

$

1,855

 

35

%

-13

%

$

5,253

 

$

6,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Credit Losses

 

972

 

1,807

 

1,512

 

-46

%

-36

%

5,842

 

8,576

 

Loan Loss Reserve Build/(Release) (a)

 

51

 

(813

)

(663

)

NM

 

NM

 

(1,607

)

(3,318

)

Provision for Benefits and Claims

 

155

 

160

 

188

 

-3

%

-18

%

651

 

779

 

Total Cost of Credit

 

$

1,178

 

$

1,154

 

$

1,037

 

2

%

14

%

$

4,886

 

$

6,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(1,055

)

$

(3,562

)

$

(1,315

)

70

%

20

%

$

(6,563

)

$

(4,222

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Asset Management

 

(12

)

(3,019

)

(92

)

100

%

87

%

(3,193

)

(295

)

Local Consumer Lending

 

(1,045

)

(693

)

(1,206

)

-51

%

13

%

(3,193

)

(4,415

)

Special Asset Pool

 

2

 

150

 

(17

)

-99

%

NM

 

(177

)

488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EOP Assets ($ in billions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Asset Management

 

9

 

9

 

27

 

—

 

-67

%

 

 

 

 

Local Consumer Lending

 

126

 

134

 

157

 

-6

%

-20

%

 

 

 

 

Special Asset Pool

 

21

 

28

 

41

 

-25

%

-49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EOP Loans ($B)

 

116

 

122

 

141

 

-5

%

-18

%

 

 

 

 

EOP Deposits ($B)

 

68

 

67

 

62

 

2

%

10

%

 

 

 

 

 


Note:  Please refer to the Appendices and Footnotes  at the end of this press release for additional information.

(a) Includes provision for unfunded lending commitments.

 

Citi Holdings

 

Citi Holdings revenues in the fourth quarter 2012 decreased 3% versus the prior year period to $1.1 billion. Revenues in the fourth quarter 2012 included CVA/DVA of $25 million ($34 million in the prior year period). Excluding CVA/DVA, Citi Holdings revenues declined 2% to $1.0 billion.  Local Consumer Lending revenues of $1.0 billion declined 21% from the prior year period primarily due to the 21% decline in average assets.  Special Asset Pool revenues were $(35) million (excluding CVA/DVA of $25 million) in the fourth quarter 2012, compared to $(268) million (excluding CVA/DVA of $34 million) in the prior year period, largely due to an improvement in asset marks.  Brokerage and Asset Management revenues were $64 million, compared to $43 million in the prior year period reflecting improved private equity marks.  As of the end of the fourth quarter 2012, total Citi Holdings assets were $156 billion, 31% below the prior year period, and represented approximately 8% of total Citigroup assets.

 

Citi Holdings net loss was $1.1 billion in the fourth quarter 2012 compared to a loss of $1.3 billion in the prior year period. Operating expenses decreased 13% to $1.6 billion reflecting the overall decline in assets.  Operating expenses in the fourth quarter 2012 included the previously mentioned $305 million charge related to the independent foreclosure review process, as well as $77 million in repositioning charges, compared to $60 million in the prior year period.

 

Citi Holdings cost of credit increased 14% to $1.2 billion versus the prior year period driven by a net loan loss reserve build of $51 million in the fourth quarter 2012, compared to a net reserve release of $663 million in the prior year period, as a significantly lower net reserver release of $49 million was more than offset by losses on loan sales of $100 million. Net credit losses in Citi Holdings decreased by $540 million or 36% from the prior year period.

 

9



 

Citi Holdings allowance for credit losses was $10.8 billion at the end of the fourth quarter 2012, or 9.35% of loans, compared to $13.4 billion, or 9.54% of loans, in the prior year period.  90+ days delinquent loans in Local Consumer Lending decreased 21% to $4.6 billion, or 4.4% of loans.

 

RESULTS BY REGION AND SEGMENT

 

 

 

Revenues

 

Income from Continuing Ops.

 

(in millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

4Q’12

 

3Q’12

 

4Q’11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

5,346

 

5,402

 

5,167

 

1,002

 

1,300

 

944

 

Securities and Banking

 

1,391

 

1,439

 

660

 

163

 

232

 

(441

)

Transaction Services

 

635

 

623

 

605

 

100

 

120

 

68

 

Total North America

 

$

7,372

 

$

7,464

 

$

6,432

 

$

1,265

 

$

1,652

 

$

571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

391

 

381

 

348

 

(38

)

10

 

(4

)

Securities and Banking

 

1,343

 

1,511

 

1,219

 

131

 

346

 

160

 

Transaction Services

 

885

 

867

 

858

 

314

 

283

 

283

 

Total EMEA

 

$

2,619

 

$

2,759

 

$

2,425

 

$

407

 

$

639

 

$

439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

2,520

 

2,419

 

2,350

 

401

 

405

 

370

 

Securities and Banking

 

705

 

802

 

579

 

278

 

363

 

198

 

Transaction Services

 

444

 

447

 

413

 

134

 

157

 

139

 

Total Latin America

 

$

3,669

 

$

3,668

 

$

3,342

 

$

813

 

$

925

 

$

707

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

1,992

 

1,978

 

2,020

 

397

 

449

 

410

 

Securities and Banking

 

854

 

1,018

 

736

 

75

 

190

 

(51

)

Transaction Services

 

685

 

721

 

748

 

265

 

286

 

277

 

Total Asia

 

$

3,531

 

$

3,717

 

$

3,504

 

$

737

 

$

925

 

$

636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate/Other

 

$

(76

)

$

33

 

$

383

 

$

(831

)

$

(55

)

$

(41

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citicorp

 

$

17,115

 

$

17,641

 

$

16,086

 

$

2,391

 

$

4,086

 

$

2,312

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citi Holdings

 

$

1,059

 

$

(3,690

)

$

1,088

 

$

(1,055

)

$

(3,562

)

$

(1,314

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citigroup

 

$

18,174

 

$

13,951

 

$

17,174

 

$

1,336

 

$

524

 

$

998

 

 

10



 

FULL YEAR RESULTS BY REGION AND SEGMENT

 

 

 

Revenues

 

Income from Cont. Ops.

 

(in millions of dollars)

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

21,081

 

20,159

 

4,815

 

4,095

 

Securities and Banking

 

6,104

 

7,558

 

1,011

 

1,044

 

Transaction Services

 

2,564

 

2,444

 

470

 

415

 

Total North America

 

$

29,749

 

$

30,161

 

$

6,296

 

$

5,554

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

1,516

 

1,558

 

(18

)

95

 

Securities and Banking

 

6,417

 

7,221

 

1,354

 

2,000

 

Transaction Services

 

3,576

 

3,486

 

1,244

 

1,130

 

Total EMEA

 

$

11,509

 

$

12,265

 

$

2,580

 

$

3,225

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

9,702

 

9,469

 

1,510

 

1,578

 

Securities and Banking

 

3,019

 

2,370

 

1,308

 

974

 

Transaction Services

 

1,797

 

1,713

 

654

 

639

 

Total Latin America

 

$

14,518

 

$

13,552

 

$

3,472

 

$

3,191

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

 

 

 

 

 

 

 

Global Consumer Banking

 

7,915

 

8,009

 

1,797

 

1,904

 

Securities and Banking

 

4,203

 

4,274

 

822

 

895

 

Transaction Services

 

2,920

 

2,936

 

1,127

 

1,165

 

Total Asia

 

$

15,038

 

$

15,219

 

$

3,746

 

$

3,964

 

 

 

 

 

 

 

 

 

 

 

Corporate/Other

 

$

192

 

$

885

 

$

(1,625

)

$

(728

)

 

 

 

 

 

 

 

 

 

 

Citicorp

 

$

71,006

 

$

72,082

 

$

14,469

 

$

15,206

 

 

 

 

 

 

 

 

 

 

 

Citi Holdings

 

$

(833

)

$

6,271

 

$

(6,560

)

$

(4,103

)

 

 

 

 

 

 

 

 

 

 

Citigroup

 

$

70,173

 

$

78,353

 

$

7,909

 

$

11,103

 

 

11



 

Citigroup will host a conference call today at 11:00 AM (EDT).  A live webcast of the presentation, as well as financial results and presentation materials, will be available at http://www.citigroup.com/citi/investor.  Dial-in numbers for the conference call are as follows: (866) 516-9582 in the U.S. and Canada; (973) 409-9210 outside of the U.S. and Canada.  The conference code for both numbers is 76758827.

 

Citigroup, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citigroup provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

 

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

 

Additional financial, statistical, and business-related information, as well as business and segment trends, is included in a Quarterly Financial Data Supplement.  Both this earnings release and Citigroup’s Fourth Quarter 2012 Quarterly Financial Data Supplement are available on Citigroup’s website at www.citigroup.com.

 

Certain statements in this release are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission.  These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances.  These statements are not guarantees of future results or occurrences.  Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors, including the precautionary statements included in this document and those contained in Citigroup’s filings with the U.S. Securities and Exchange Commission, including without limitation the “Risk Factors” section of Citigroup’s 2011 Annual Report on Form 10-K. Any forward-looking statements made by or on behalf of Citigroup speak only as to the date they are made, and Citigroup does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

 

Contacts:

Press:      Shannon Bell                (212) 793-6206            Investors:   Susan Kendall         (212) 559-2718

                Mark Costiglio             (212) 559-4114

 

Appendix A: CVA/DVA

 

(In millions of dollars)

 

4Q’12

 

3Q’12

 

4Q’11

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities and Banking

 

 

 

 

 

 

 

 

 

 

 

DVA on Citi Liabilities at Fair Value Option

 

(452

)

(549

)

43

 

(1,989

)

1,746

 

Derivative Counterparty CVA(a)

 

108

 

204

 

84

 

531

 

(866

)

Derivative Own-Credit CVA (a)

 

(166

)

(454

)

(200

)

(1,028

)

852

 

Total Securities and Banking CVA/DVA

 

$

(510

)

$

(799

)

$

(74

)

$

(2,487

)

$

1,732

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Asset Pool

 

 

 

 

 

 

 

 

 

 

 

DVA on Citi Liabilities at Fair Value Option

 

(4

)

(11

)

(2

)

(20

)

28

 

Derivative Counterparty CVA(a)

 

37

 

46

 

53

 

274

 

36

 

Derivative Own-Credit CVA (a)

 

(8

)

(12

)

(17

)

(99

)

11

 

Total Special Asset Pool CVA/DVA

 

$

25

 

$

23

 

$

34

 

$

157

 

$

74

 

Total Citigroup CVA/DVA

 

$

(485

)

$

(776

)

$

(40

)

$

(2,330

)

$

1,806

 

 


Note: Totals may not sum due to rounding.

(a) Net of hedges.

 

12


 


 

Appendix B: Non-GAAP Financial Measures - Adjusted Items

 

FOURTH QUARTER 2012

 

 

($ millions, except per share amounts)

 

As Reported
(GAAP)

 

Impact of:
CVA/DVA

 

Impact of:
Minority
Investments

 

Impact of:
Repositioning

 

Results less:
Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

18,174

 

(485

)

—

 

—

 

18,659

 

EBT

 

1,130

 

(485

)

—

 

(1,028

)

2,643

 

Taxes

 

(206

)

(184

)

—

 

(375

)

353

 

Income from Continuing Ops.

 

$

1,336

 

$

(301

)

$

—

 

$

(653

)

$

2,290

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

(112

)

—

 

—

 

—

 

(112

)

Noncontrolling Interests

 

28

 

—

 

—

 

—

 

28

 

Net Income

 

$

1,196

 

$

(301

)

$

—

 

$

(653

)

$

2,150

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (a)

 

$

0.38

 

$

(0.10

)

 

 

$

(0.21

)

$

0.69

 

 


(a)  Earnings per share calculations are based on diluted shares of 3,017.0 million.  The components of earnings per share excluding CVA/DVA and repositioning may not sum across due to rounding.

 

THIRD QUARTER 2012

 

($ millions, except per share amounts)

 

As Reported
(GAAP)

 

Impact of:
CVA/DVA

 

Impact of:
Minority
Investments

 

Impact of:
Tax Item

 

Results less:
Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

13,951

 

(776

)

(4,684

)

—

 

19,411

 

EBT

 

(964

)

(776

)

(4,684

)

—

 

4,496

 

Taxes

 

(1,488

)

(291

)

(1,787

)

582

 

1,172

 

Income from Continuing Ops.

 

$

524

 

$

(485

)

$

(2,897

)

$

582

 

$

3,324

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

(31

)

—

 

—

 

—

 

(31

)

Noncontrolling Interests

 

25

 

—

 

—

 

—

 

25

 

Net Income

 

$

468

 

$

(485

)

$

(2,897

)

$

582

 

$

3,268

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (a)

 

$

0.15

 

$

(0.16

)

$

(0.94

)

$

0.19

 

$

1.06

 

 


(a)  Earnings per share calculations are based on diluted shares of 3,015.3 million.  The components of earnings per share excluding CVA/DVA,  the impact of minority investments, and the tax item  may not sum across due to rounding.

 

FOURTH QUARTER 2011

 

($ millions, except per share amounts)

 

As Reported
(GAAP)

 

Impact of:
CVA/DVA

 

Impact of:
Minority
Investments

 

Impact of:
Repositioning

 

Results less:
Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

17,174

 

(40

)

—

 

—

 

17,214

 

EBT

 

1,089

 

(40

)

—

 

(428

)

1,557

 

Taxes

 

91

 

(18

)

—

 

(153

)

262

 

Income from Continuing Ops.

 

$

998

 

$

(22

)

$

—

 

$

(275

)

$

1,295

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

—

 

—

 

—

 

—

 

—

 

Noncontrolling Interests

 

42

 

—

 

—

 

—

 

42

 

Net Income

 

$

956

 

$

(22

)

$

—

 

$

(275

)

$

1,253

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (a)

 

$

0.31

 

$

(0.01

)

 

 

$

(0.09

)

$

0.41

 

 


(a)  Earnings per share calculations are based on diluted shares of 3,003.0 million.  The components of earnings per share excluding CVA/DVA and repositioning may not sum across due to rounding.

 

13



 

Appendix B: Non-GAAP Financial Measures - Adjusted Items (continued)

 

FULL YEAR 2012

 

($ millions, except per share amounts)

 

As Reported
(GAAP)

 

Impact of:
CVA/DVA

 

Impact of:
Minority
Investments

 

Impact of:
4Q
Repositioning

 

Impact of:
Tax Item

 

Results less:
Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

70,173

 

(2,330

)

(4,631

)

—

 

—

 

77,134

 

EBT

 

7,936

 

(2,330

)

(4,631

)

(1,028

)

—

 

15,925

 

Taxes

 

27

 

(885

)

(1,772

)

(375

)

582

 

3,641

 

Income from Continuing Ops.

 

$

7,909

 

$

(1,446

)

$

(2,863

)

$

(653

)

$

582

 

$

12,289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

(149

)

—

 

—

 

—

 

—

 

(149

)

Noncontrolling Interests

 

219

 

—

 

—

 

—

 

—

 

219

 

Net Income

 

$

7,541

 

$

(1,446

)

$

(2,863

)

$

(653

)

$

582

 

$

11,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (a)

 

$

2.44

 

$

(0.47

)

$

(0.93

)

$

(0.21

)

$

0.19

 

$

3.86

 

 


(a)  Earnings per share calculations are based on diluted shares of 3,015.5 million.  The components of earnings per share excluding CVA/DVA, the impact of minority investments, 4Q repositioning and the tax item  may not sum across due to rounding.

 

FULL YEAR 2011

 

($ millions, except per share amounts)

 

As Reported
(GAAP)

 

Impact of:
CVA/DVA

 

Impact of:
Minority
Investments

 

Impact of:
4Q
Repositioning

 

Impact of:
Tax Item

 

Results less:
Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

78,353

 

1,806

 

199

 

—

 

—

 

76,348

 

EBT

 

14,624

 

1,806

 

199

 

(428

)

—

 

13,047

 

Taxes

 

3,521

 

681

 

71

 

(153

)

—

 

2,922

 

Income from Continuing Ops.

 

$

11,103

 

$

1,125

 

$

128

 

$

(275

)

$

—

 

$

10,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

112

 

—

 

—

 

—

 

—

 

112

 

Noncontrolling Interests

 

148

 

—

 

—

 

—

 

—

 

148

 

Net Income

 

$

11,067

 

$

1,125

 

$

128

 

$

(275

)

$

—

 

$

10,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (a)

 

$

3.63

 

$

0.37

 

$

0.04

 

$

(0.09

)

—

 

$

3.30

 

 


(a)  Earnings per share calculations are based on diluted shares of 2,998.8 million.  The components of earnings per share excluding CVA/DVA, the impact of minority investments, and 4Q repositioning may not sum across due to rounding.

 

Appendix C: Repositioning Charges(a)

 

 

 

2011

 

2012

 

FY

 

(In millions of dollars)

 

1Q’11

 

2Q’11

 

3Q’11

 

4Q’11

 

1Q’12

 

2Q’12

 

3Q’12

 

4Q’12

 

2011

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

2

 

$

8

 

$

28

 

$

18

 

$

2

 

$

—

 

$

4

 

$

100

 

$

57

 

$

106

 

Asia

 

—

 

—

 

—

 

23

 

2

 

—

 

18

 

78

 

23

 

98

 

LATAM

 

—

 

—

 

—

 

23

 

—

 

18

 

5

 

131

 

23

 

153

 

EMEA

 

—

 

1

 

—

 

1

 

10

 

4

 

2

 

57

 

2

 

73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Global Consumer Banking

 

2

 

9

 

29

 

65

 

14

 

21

 

29

 

366

 

105

 

431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities and Banking

 

4

 

18

 

30

 

215

 

23

 

89

 

—

 

237

 

267

 

349

 

Transaction Services

 

—

 

—

 

6

 

54

 

8

 

30

 

—

 

95

 

60

 

134

 

Corporate/Other

 

22

 

4

 

44

 

34

 

18

 

44

 

52

 

253

 

104

 

367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Citicorp

 

29

 

31

 

109

 

368

 

63

 

184

 

82

 

951

 

537

 

1280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citi Holdings

 

6

 

5

 

99

 

60

 

3

 

2

 

13

 

77

 

170

 

95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Citigroup

 

$

35

 

$

36

 

$

208

 

$

428

 

$

66

 

$

186

 

$

95

 

$

1,028

 

$

707

 

$

1,375

 

 


Note: Totals may not sum due to rounding.

 

(a) Adjusted items above include only fourth quarter 2011 and fourth quarter 2012 repositioning charges, given the significant impact  on Citigroup’s results of operations in those periods.

 

14



 

Appendix D: Non-GAAP Financial Measures-International GCB Excluding Impact of FX Translation

 

 

 

 

 

QoQ%

 

YoY%

 

(In millions of dollars)

 

4Q’12

 

Reported

 

Constant Dollar

 

Reported

 

Constant Dollar

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

LATAM

 

2,520

 

4

%

4

%

7

%

7

%

Asia

 

1,992

 

1

%

0

%

-1

%

-2

%

EMEA

 

391

 

3

%

1

%

12

%

11

%

Total International GCB

 

$

4,903

 

3

%

2

%

4

%

4

%

Expenses

 

 

 

 

 

 

 

 

 

 

 

LATAM

 

1,588

 

14

%

14

%

13

%

14

%

Asia

 

1,241

 

3

%

3

%

6

%

5

%

EMEA

 

402

 

20

%

18

%

23

%

22

%

Total International GCB

 

$

3,231

 

10

%

10

%

11

%

12

%

 

Note: Totals may not sum due to rounding.

 

Appendix E: Non-GAAP Financial Measures - Basel III Capital

 

(In millions of dollars)

 

12/31/12 (a)

 

9/30/2012

 

6/30/2012

 

Citigroup’s Common Stockholders’ Equity

 

$

186,487

 

$

186,465

 

$

183,599

 

Add: Qualifying Minority Interests

 

171

 

161

 

150

 

Regulatory Capital Adjustments

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

Accumulated net unrealized losses on cash flow hedges, net of tax

 

(2,293

)

(2,503

)

(2,689

)

Cumulative change in fair value of financial liabilities attributable to the change in own creditworthiness, net of tax

 

587

 

998

 

1,649

 

Intangible Assets

 

 

 

 

 

 

 

Goodwill (b)

 

27,004

 

27,248

 

29,108

 

Identifiable intangible assets other than mortgage servicing rights (MSRs)

 

5,716

 

5,983

 

6,156

 

Defined benefit pension plan net assets

 

732

 

752

 

910

 

Deferred tax assets (DTAs) arising from net operating losses and foreign tax credit carry forwards and excess over 10% / 15% limitations for other DTAs, certain common equity investments, and MSRs (c)

 

49,518

 

48,249

 

49,751

 

 

 

 

 

 

 

 

 

Total Basel III Tier 1 Common Capital (d)

 

$

105,394

 

$

106,899

 

$

98,864

 

 

 

 

 

 

 

 

 

Risk-Weighted Assets (RWA) (e)

 

$

1,206,722

 

$

1,236,619

 

$

1,250,233

 

 

 

 

 

 

 

 

 

Basel III Tier 1 Common Capital Ratio (d)

 

8.7

%

8.6

%

7.9

%

 


(a)                   Preliminary.

(b)                   Includes goodwill embedded in the valuation of significant common stock investments in unconsolidated financial institutions.

(c)                    Other DTAs reflect those DTAs arising from temporary differences.

(d)                   Calculated based on the U.S. regulators proposed rules relating to Basel III (NPR).  Citigroup’s estimated Basel III Tier 1 Common Capital and Tier 1 Common Capital Ratio are based on its current interpretation, expectations, and understanding of the respective Basel III requirements and are necessarily subject to final regulatory clarity and rulemaking, model calibration, and other implementation guidance in the U.S.

(e)                    The estimated Basel III risk-weighted assets have been calculated based on the proposed “advanced approaches” for determining risk-weighted assets under the NPR, as well as the final U.S. market risk capital rules (Basel II.5).

 

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Appendix F: Non-GAAP Financial Measures - Tangible Common Equity

 

 

 

Preliminary

 

($ millions, except per share amounts)

 

12/31/2012

 

 

 

 

 

Citigroup’s Total Stockholders’ Equity

 

$

189,049

 

Less: Preferred Stock

 

2,562

 

Common Stockholders’ Equity

 

186,487

 

Less:

 

 

 

Goodwill

 

25,673

 

Intangible Assets (other than Mortgage Servicing Rights)

 

5,697

 

Goodwill and Intangible Assets (Other than MSRs) Related to Assets For Discontinued Operations Held-for-Sale

 

32

 

Net Deferred Tax Assets Related to Goodwill and Intangible Assets

 

32

 

Tangible Common Equity (TCE)

 

$

155,053

 

 

 

 

 

Common Shares Outstanding at Quarter-end

 

3,028.9

 

 

 

 

 

Tangible Book Value Per Share

 

$

51.19

 

(Tangible Common Equity / Common Shares Outstanding)

 

 

 

 

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(1) Credit valuation adjustments (CVA) on derivatives (counterparty and own-credit), net of hedges, and debt valuation adjustments (DVA) on Citigroup’s fair value option debt. See Appendix A.  Presentation of Citigroup’s results of operations, excluding the impact of CVA/DVA, are non-GAAP financial measures.  Citigroup believes the presentation of its results of operations excluding the impact of CVA/DVA provides a more meaningful depiction of the underlying fundamentals of its businesses impacted by CVA/DVA.  For a reconciliation of these measures to the reported results, see Appendix B.

 

(2) As previously announced, Citigroup recorded a repositioning charge of $1.0 billion ($653 million after-tax) in the fourth quarter 2012. In the fourth quarter 2011, Citigroup reported a $428 million repositioning charge ($275 million after-tax).  See Appendix C. Presentation of Citigroup’s results of operations, excluding the impact of repositioning charges in each of these respective quarters, are non-GAAP financial measures.  Citigroup believes the presentation of its results of operations excluding the impact of repositioning charges in the fourth quarter 2011 and fourth quarter 2012, which were significantly impacted by repositioning charges (see Appendix C), provides a more meaningful depiction of the underlying fundamentals of its businesses.  For a reconciliation of these measures to the reported results, see Appendix B.

 

(3) Citigroup’s estimated Basel III Tier 1 Common Ratio and certain related components are non-GAAP financial measures. Citigroup believes this ratio and its components provide useful information to investors and others by measuring Citigroup’s progress against expected future regulatory capital standards. For the calculation of Citigroup’s estimated Basel III Tier 1 Common Ratio for the periods presented, see Appendix E. Citigroup’s estimated Basel III Tier 1 Common Ratio is based on its current interpretation, expectations and understanding of the respective proposed Basel III requirements and is necessarily subject to final regulatory clarity and rulemaking, model calibration and approvals and other implementation guidance in the U.S.

 

(4) Minority investments refer to the impact of transactions related to Citigroup’s interests in Akbank T.A.S. (Akbank), the Morgan Stanley Smith Barney joint venture (MSSB JV), Housing Development Finance Corporation Ltd. (HDFC) and Shanghai Pudong Development Bank (SPDB) during 2011 and 2012. Third quarter 2012 included a non-cash charge to net income of $4.7 billion ($2.9 billion after-tax) relating to the MSSB JV, consisting of (i) a loss on Citigroup’s sale of a 14% interest in the MSSB JV to Morgan Stanley of $1.4 billion ($800 million after-tax), and (ii) an other-than-temporary impairment of the carrying value of Citigroup’s remaining 35% interest in the MSSB JV of $3.3 billion ($2.1 billion after-tax). These charges were recorded in Citi Holdings — Brokerage and Asset Management. Second quarter 2012 included a loss on the partial sale of Citi’s minority interest in Akbank of $424 million ($274 million after-tax), recorded in Corporate/Other.  First quarter 2012 included gains on the sale of Citi’s remaining minority interest in HDFC and its minority interest in SPDB of $1.1 billion ($722 million after-tax) and $542 million ($349 million after-tax), respectively, as well as an impairment charge related to its minority interest in Akbank of $1.2 billion ($763 million after-tax), all recorded in Corporate/Other.  Second quarter 2011 included a gain on the partial sale of Citi’s minority interest in HDFC of $199 million ($128 million after-tax), recorded in Corporate/Other. Presentation of Citigroup’s results of operations, excluding the impact of these minority investment transactions, are non-GAAP financial measures.  Citigroup believes the presentation of its results of operations excluding the impact of these minority investment transactions provides a more meaningful depiction of the underlying fundamentals of its businesses.  For a reconciliation of these measures to the reported results, see Appendix B.

 

(5) Third quarter 2012 results included a $582 million tax benefit related to the resolution of certain tax audit items, recorded in Corporate/Other. Presentation of Citigroup’s results of operations, excluding the impact of this tax benefit, are non-GAAP financial measures.  Citigroup believes the presentation of its results of operations excluding the impact of this tax benefit provides a more meaningful depiction of the underlying fundamentals of its businesses.  For a reconciliation of these measures to the reported results, see Appendix B.

 

(6) The results of operations for Citicorp include the results of operations of Corporate/Other for all periods presented.

 

(7) Tangible book value per share is a non-GAAP financial measure. This metric is a capital adequacy metric used and relied upon by investors and industry analysts. For a reconciliation of this metric to the most directly comparable GAAP measure, see Appendix F.

 

(8) See Appendix D.

 

(9) Lending revenues exclude the impact of gains / losses on hedges related to accrual loans.  Hedges on accrual loans reflect the mark-to-market on credit derivatives used to hedge the corporate loan portfolio. The fixed premium cost of these hedges is included (netted against) the core lending revenues to reflect the cost of the credit protection.

 

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