LOANS

6 Months Ended

Jun. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Citigroup loans are reported in two categories—consumer and corporate. These categories are classified primarily according to the segment and subsegment that manage the loans.

Consumer Loans

Consumer loans represent loans and leases managed primarily by the Global Consumer Banking businesses in Citicorp and in Citi Holdings. The following table provides information by loan type for the periods indicated:



In millions of dollars	June 30, 2014			December 31, 2013
Consumer loans
In U.S. offices
Mortgage and real estate⁽¹⁾	$	103,905		$	108,453
Installment, revolving credit, and other	13,192			13,398
Cards	109,138			115,651
Commercial and industrial	6,972			6,592
	$	233,207		$	244,094
In offices outside the U.S.
Mortgage and real estate⁽¹⁾	$	57,291		$	55,511
Installment, revolving credit, and other	34,560			33,182
Cards	34,252			36,740
Commercial and industrial	24,916			24,107
Lease financing	735			769
	$	151,754		$	150,309
Total Consumer loans	$	384,961		$	394,403
Net unearned income	(616		)	(572		)
Consumer loans, net of unearned income	$	384,345		$	393,831


(1)	Loans secured primarily by real estate.

Citigroup has established a risk management process to monitor, evaluate and manage the principal risks associated with its consumer loan portfolio. Credit quality indicators that are actively monitored include delinquency status, consumer credit scores (FICO), and loan to value (LTV) ratios, each as discussed in more detail below.

Included in the loan table above are lending products whose terms may give rise to greater credit issues. Credit cards with below-market introductory interest rates and interest-only loans are examples of such products. These products are closely managed using credit techniques that are intended to mitigate their higher inherent risk.

During the three and six months ended June 30, 2014 and 2013, the Company sold and/or reclassified to held-for-sale $3.4 billion and $6.5 billion, and $3.8 billion and $10.2 billion respectively, of consumer loans. The Company did not have significant purchases of consumer loans during the three and six months ended June 30, 2014 and 2013.

Delinquency Status

Delinquency status is monitored and considered a key indicator of credit quality of consumer loans. Substantially all of the U.S. residential first mortgage loans use the Mortgage Banking Association (MBA) method of reporting delinquencies, which considers a loan delinquent if a monthly payment has not been received by the end of the day immediately preceding the loan’s next due date. All other loans use the Office of Thrift Supervision (OTS) method of reporting delinquencies, which considers a loan delinquent if a monthly payment has not been received by the close of business on the loan’s next due date.

As a general policy, residential first mortgages, home equity loans and installment loans are classified as non-accrual when loan payments are 90 days contractually past due. Credit cards and unsecured revolving loans generally accrue interest until payments are 180 days past due. Home equity loans in regulated bank entities are classified as non-accrual if the related residential first mortgage is 90 days or more past due. Mortgage loans in regulated bank entities discharged through Chapter 7 bankruptcy, other than FHA-insured loans, are classified as non-accrual. Commercial market loans are placed on a cash (non-accrual) basis when it is determined, based on actual experience and a forward-looking assessment of the collectability of the loan in full, that the payment of interest or principal is doubtful or when interest or principal is 90 days past due.

The policy for re-aging modified U.S. consumer loans to current status varies by product. Generally, one of the conditions to qualify for these modifications is that a minimum number of payments (typically ranging from one to three) be made. Upon modification, the loan is re-aged to current status. However, re-aging practices for certain open-ended consumer loans, such as credit cards, are governed by Federal Financial Institutions Examination Council (FFIEC) guidelines. For open-ended consumer loans subject to FFIEC guidelines, one of the conditions for the loan to be re-aged to current status is that at least three consecutive minimum monthly payments, or the equivalent amount, must be received. In addition, under FFIEC guidelines, the number of times that such a loan can be re-aged is subject to limitations (generally once in 12 months and twice in five years). Furthermore, Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans are modified under those respective agencies’ guidelines and payments are not always required in order to re-age a modified loan to current.

The following tables provide details on Citigroup’s consumer loan delinquency and non-accrual loans as of June 30, 2014 and December 31, 2013:

Consumer Loan Delinquency and Non-Accrual Details at June 30, 2014



In millions of dollars	Total current⁽¹⁾⁽²⁾		30-89 days past due⁽³⁾		≥ 90 days past due⁽³⁾		Past due government guaranteed⁽⁴⁾		Total loans⁽²⁾		Total non-accrual		90 days past due and accruing
In North America offices
Residential first mortgages	$	65,254	$	1,796	$	1,922	$	4,406	$	73,378	$	3,273	$	3,517
Home equity loans⁽⁵⁾	28,987		353		578		—		29,918		1,329		—
Credit cards	108,031		1,223		1,189		—		110,443		—		1,192
Installment and other	12,404		200		173		—		12,777		90		4
Commercial market loans	8,489		28		18		—		8,535		217		7
Total	$	223,165	$	3,600	$	3,880	$	4,406	$	235,051	$	4,909	$	4,720
In offices outside North America
Residential first mortgages	$	47,675	$	404	$	299	$	—	$	48,378	$	554	$	—
Home equity loans⁽⁵⁾	—		—		—		—		—		—		—
Credit cards	32,235		717		601		—		33,553		451		429
Installment and other	31,569		413		174		—		32,156		252		—
Commercial market loans	34,445		98		381		—		34,924		517		—
Total	$	145,924	$	1,632	$	1,455	$	—	$	149,011	$	1,774	$	429
Total GCB and Citi Holdings	$	369,089	$	5,232	$	5,335	$	4,406	$	384,062	$	6,683	$	5,149
Other	283		—		—		—		283		33		—
Total Citigroup	$	369,372	$	5,232	$	5,335	$	4,406	$	384,345	$	6,716	$	5,149


(1)	Loans less than 30 days past due are presented as current.


(2)	Includes $46 million of residential first mortgages recorded at fair value.


(3)	Excludes loans guaranteed by U.S. government entities.


(4)	Consists of residential first mortgages that are guaranteed by U.S. government entities that are 30-89 days past due of $0.9 billion and 90 days past due of $3.5 billion.


(5)	Fixed rate home equity loans and loans extended under home equity lines of credit, which are typically in junior lien positions.

Consumer Loan Delinquency and Non-Accrual Details at December 31, 2013



In millions of dollars	Total current⁽¹⁾⁽²⁾		30-89 days past due⁽³⁾		≥ 90 days past due⁽³⁾		Past due government guaranteed⁽⁴⁾		Total loans⁽²⁾		Total non-accrual		90 days past due and accruing
In North America offices
Residential first mortgages	$	66,612	$	2,044	$	1,975	$	5,271	$	75,902	$	3,415	$	3,997
Home equity loans⁽⁵⁾	30,603		434		605		—		31,642		1,452		—
Credit cards	113,886		1,491		1,452		—		116,829		—		1,456
Installment and other	12,609		225		243		—		13,077		247		7
Commercial market loans	8,630		26		28		—		8,684		112		7
Total	$	232,340	$	4,220	$	4,303	$	5,271	$	246,134	$	5,226	$	5,467
In offices outside North America
Residential first mortgages	$	46,067	$	435	$	332	$	—	$	46,834	$	584	$	—
Home equity loans⁽⁵⁾	—		—		—		—		—		—		—
Credit cards	34,733		780		641		—		36,154		402		413
Installment and other	30,138		398		158		—		30,694		230		—
Commercial market loans	33,242		111		295		—		33,648		610		—
Total	$	144,180	$	1,724	$	1,426	$	—	$	147,330	$	1,826	$	413
Total GCB and Citi Holdings	$	376,520	$	5,944	$	5,729	$	5,271	$	393,464	$	7,052	$	5,880
Other	367		—		—		—		367		43		—
Total Citigroup	$	376,887	$	5,944	$	5,729	$	5,271	$	393,831	$	7,095	$	5,880


(1)	Loans less than 30 days past due are presented as current.


(2)	Includes $0.9 billion of residential first mortgages recorded at fair value.


(3)	Excludes loans guaranteed by U.S. government entities.


(4)	Consists of residential first mortgages that are guaranteed by U.S. government entities that are 30-89 days past due of $1.2 billion and 90 days past due of $4.1 billion.


(5)	Fixed rate home equity loans and loans extended under home equity lines of credit, which are typically in junior lien positions.

Consumer Credit Scores (FICO)

In the U.S., independent credit agencies rate an individual’s risk for assuming debt based on the individual’s credit history and assign every consumer a “FICO” (Fair Issac’s Corporation) credit score. These scores are continually updated by the agencies based upon an individual’s credit actions (e.g., taking out a loan or missed or late payments).

The following table provides details on the FICO scores attributable to Citi’s U.S. consumer loan portfolio as of June 30, 2014 and December 31, 2013 (commercial market loans are not included in the table since they are business-based and FICO scores are not a primary driver in their credit evaluation). FICO scores are updated monthly for substantially all of the portfolio or, otherwise, on a quarterly basis.



FICO score distribution in U.S. portfolio⁽¹⁾⁽²⁾	June 30, 2014
In millions of dollars	Less than 620		≥ 620 but less than 660		Equal to or greater than 660
Residential first mortgages	$	10,853	$	6,165	$	46,910
Home equity loans	3,612		2,620		22,110
Credit cards	7,242		9,922		89,795
Installment and other	3,812		2,497		5,107
Total	$	25,519	$	21,204	$	163,922


(1)	Excludes loans guaranteed by U.S. government entities, loans subject to long-term standby commitments (LTSCs) with U.S. government-sponsored entities and loans recorded at fair value.


(2)	Excludes balances where FICO was not available. Such amounts are not material.



FICO score distribution in U.S. portfolio⁽¹⁾⁽²⁾	December 31, 2013
In millions of dollars	Less than 620		≥ 620 but less than 660		Equal to or greater than 660
Residential first mortgages	$	11,860	$	6,426	$	46,207
Home equity loans	4,093		2,779		23,152
Credit cards	8,125		10,693		94,437
Installment and other	3,900		2,399		5,186
Total	$	27,978	$	22,297	$	168,982


(1)	Excludes loans guaranteed by U.S. government entities, loans subject to LTSCs with U.S. government-sponsored entities and loans recorded at fair value.


(2)	Excludes balances where FICO was not available. Such amounts are not material.

Loan to Value (LTV) Ratios

LTV ratios (loan balance divided by appraised value) are calculated at origination and updated by applying market price data.

The following tables provide details on the LTV ratios attributable to Citi’s U.S. consumer mortgage portfolios as of June 30, 2014 and December 31, 2013. LTV ratios are updated monthly using the most recent Core Logic HPI data available for substantially all of the portfolio applied at the Metropolitan Statistical Area level, if available, or the state level if not. The remainder of the portfolio is updated in a similar manner using the Office of Federal Housing Enterprise Oversight indices.



LTV distribution in U.S. portfolio⁽¹⁾⁽²⁾	June 30, 2014
In millions of dollars	Less than or equal to 80%		> 80% but less than or equal to 100%		Greater than 100%
Residential first mortgages	$	47,929	$	13,555	$	2,603
Home equity loans	14,429		8,254		5,534
Total	$	62,358	$	21,809	$	8,137


(1)	Excludes loans guaranteed by U.S. government entities, loans subject to LTSCs with U.S. government-sponsored entities and loans recorded at fair value.


(2)	Excludes balances where LTV was not available. Such amounts are not material.



LTV distribution in U.S. portfolio⁽¹⁾⁽²⁾	December 31, 2013
In millions of dollars	Less than or equal to 80%		> 80% but less than or equal to 100%		Greater than 100%
Residential first mortgages	$	45,809	$	13,458	$	5,269
Home equity loans	14,216		8,685		6,935
Total	$	60,025	$	22,143	$	12,204


(1)	Excludes loans guaranteed by U.S. government entities, loans subject to LTSCs with U.S. government-sponsored entities and loans recorded at fair value.


(2)	Excludes balances where LTV was not available. Such amounts are not material.

Impaired Consumer Loans

Impaired loans are those loans that Citigroup believes it is probable all amounts due according to the original contractual terms of the loan will not be collected. Impaired consumer loans include non-accrual commercial market loans, as well as smaller-balance homogeneous loans whose terms have been modified due to the borrower’s financial difficulties and where Citigroup has granted a concession to the borrower. These modifications may include interest rate reductions and/or principal forgiveness. Impaired consumer loans exclude smaller-balance homogeneous loans that have not been modified and are carried on a non-accrual basis. In addition, impaired consumer loans exclude substantially all loans modified pursuant to Citi’s short-term modification programs (i.e., for periods of 12 months or less) that were modified prior to January 1, 2011.

As a result of OCC guidance issued in the third quarter of 2012, mortgage loans to borrowers that have gone through Chapter 7 bankruptcy are classified as troubled debt restructurings (TDRs). These TDRs, other than FHA-insured loans, are written down to collateral value less cost to sell. FHA-insured loans are reserved based on a discounted cash flow model (see Note 1 to the Consolidated Financial Statements in Citi’s 2013 Annual Report on Form 10-K).

The following tables present information about total impaired consumer loans at and for the periods ended June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and June 30, 2013 for interest income recognized on impaired consumer loans:



									Three months ended June 30,				Six months ended June 30,
	Balance at June 30, 2014								2014		2013		2014		2013
In millions of dollars	Recorded investment⁽¹⁾⁽²⁾		Unpaid principal balance		Related specific allowance⁽³⁾		Average carrying value⁽⁴⁾		Interest income recognized⁽⁵⁾⁽⁶⁾		Interest income recognized⁽⁵⁾⁽⁶⁾		Interest income recognized⁽⁵⁾⁽⁶⁾		Interest income recognized⁽⁵⁾⁽⁶⁾
Mortgage and real estate
Residential first mortgages	$	15,965	$	16,962	$	2,215	$	16,660	$	181	$	207	$	365	$	424
Home equity loans	2,087		2,729		562		2,147		19		18		38		39
Credit cards	2,826		2,868		965		3,192		50		61		101		126
Installment and other
Individual installment and other	986		999		476		1,043		29		34		63		83
Commercial market loans	367		565		182		375		4		8		15		12
Total⁽⁷⁾	$	22,231	$	24,123	$	4,400	$	23,417	$	283	$	328	$	582	$	684


(1)	Recorded investment in a loan includes net deferred loan fees and costs, unamortized premium or discount and direct write-downs and includes accrued interest only on credit card loans.


(2)	$2,106 million of residential first mortgages, $564 million of home equity loans and $86 million of commercial market loans do not have a specific allowance.

(3) Included in the Allowance for loan losses.

(4) Average carrying value represents the average recorded investment ending balance for the last four quarters and does not include the related specific allowance.

(5) Includes amounts recognized on both an accrual and cash basis.

(6) Cash interest receipts on smaller-balance homogeneous loans are generally recorded as revenue. The interest recognition policy for commercial market loans is identical to that for corporate loans, as described below.

(7) Prior to 2008, the Company’s financial accounting systems did not separately track impaired smaller-balance, homogeneous consumer loans whose terms were modified due to the borrowers’ financial difficulties and where it was determined that a concession was granted to the borrower. Smaller-balance consumer loans modified since January 1, 2008 amounted to $21.9 billion at June 30, 2014. However, information derived from Citi’s risk management systems indicates that the amounts of outstanding modified loans, including those modified prior to 2008, approximated $22.5 billion at June 30, 2014.



	Balance at December 31, 2013
In millions of dollars	Recorded investment⁽¹⁾⁽²⁾		Unpaid principal balance		Related specific allowance⁽³⁾		Average carrying value⁽⁴⁾
Mortgage and real estate
Residential first mortgages	$	16,801	$	17,788	$	2,309	$	17,616
Home equity loans	2,141		2,806		427		2,116
Credit cards	3,339		3,385		1,178		3,720
Installment and other
Individual installment and other	1,114		1,143		536		1,094
Commercial market loans	398		605		183		404
Total⁽⁵⁾	$	23,793	$	25,727	$	4,633	$	24,950


(1)	Recorded investment in a loan includes net deferred loan fees and costs, unamortized premium or discount and direct write-downs and includes accrued interest only on credit card loans.


(2)	$2,169 million of residential first mortgages, $568 million of home equity loans and $111 million of commercial market loans do not have a specific allowance.


(3)	Included in the Allowance for loan losses.


(4)	Average carrying value represents the average recorded investment ending balance for last four quarters and does not include related specific allowance.

(5) Prior to 2008, the Company’s financial accounting systems did not separately track impaired smaller-balance, homogeneous consumer loans whose terms were modified due to the borrowers’ financial difficulties and where it was determined that a concession was granted to the borrower. Smaller-balance consumer loans modified since January 1, 2008 amounted to $23.4 billion at December 31, 2013. However, information derived from Citi’s risk management systems indicates that the amounts of outstanding modified loans, including those modified prior to 2008, approximated $24.0 billion at December 31, 2013.

Consumer Troubled Debt Restructurings

The following tables present consumer TDRs occurring during the three and six months ended June 30, 2014 and 2013:



	At and for the three months ended June 30, 2014
In millions of dollars except number of loans modified	Number of loans modified	Post- modification recorded investment⁽¹⁾⁽²⁾		Deferred principal⁽³⁾		Contingent principal forgiveness⁽⁴⁾		Principal forgiveness⁽⁵⁾		Average interest rate reduction
North America
Residential first mortgages	4,568	$	534	$	10	$	7	$	2	1	%
Home equity loans	1,741	63		1		—		2		3
Credit cards	42,750	190		—		—		—		15
Installment and other revolving	10,830	81		—		—		—		6
Commercial markets⁽⁶⁾	53	9		—		—		—		—
Total⁽⁸⁾	59,942	$	877	$	11	$	7	$	4
International
Residential first mortgages	743	$	27	$	—	$	—	$	—	1	%
Home equity loans	6	1		—		—		—		—
Credit cards	51,536	141		—		—		10		21
Installment and other revolving	18,774	78		—		—		4		15
Commercial markets⁽⁶⁾	124	41		—		—		—		1
Total⁽⁸⁾	71,183	$	288	$	—	$	—	$	14



	At and for the three months ended June 30, 2013
In millions of dollars except number of loans modified	Number of loans modified	Post- modification recorded investment⁽¹⁾⁽⁷⁾		Deferred principal⁽³⁾		Contingent principal forgiveness⁽⁴⁾		Principal forgiveness⁽⁵⁾		Average interest rate reduction
North America
Residential first mortgages	9,071	$	1,208	$	12	$	2	$	42	1	%
Home equity loans	4,235	283		—				8		1
Credit cards	36,785	182		—		—		—		14
Installment and other revolving	10,335	74		—		—		—		6
Commercial markets⁽⁶⁾	65	5		—		—		—		—
Total⁽⁸⁾	60,491	$	1,752	$	12	$	2	$	50
International
Residential first mortgages	1,147	$	57	$	—	$	—	$	1	1	%
Home equity loans	1	—		—		—		—		—
Credit cards	34,632	139		—		—		3		14
Installment and other revolving	13,668	80		—		—		2		8
Commercial markets⁽⁶⁾	122	36		1		—		—		—
Total⁽⁸⁾	49,570	$	312	$	1	$	—	$	6


(1)	Post-modification balances include past due amounts that are capitalized at the modification date.

(2)

Post-modification balances in North America include $54 million of residential first mortgages and $15 million of home equity loans to borrowers who have gone through Chapter 7 bankruptcy in the three months ended June 30, 2014. These amounts include $30 million of residential first mortgages and $12 million of home equity loans that are newly classified as TDRs in the three months ended June 30, 2014 as a result of OCC guidance, as described above.


(3)	Represents portion of contractual loan principal that is non-interest bearing but still due from the borrower. Such deferred principal is charged off at the time of permanent modification to the extent that the related loan balance exceeds the underlying collateral value.


(4)	Represents portion of contractual loan principal that is non-interest bearing and, depending upon borrower performance, eligible for forgiveness.


(5)	Represents portion of contractual loan principal that was forgiven at the time of permanent modification.

(6) Commercial markets loans are generally borrower-specific modifications and incorporate changes in the amount and/or timing of principal and/or interest.

(7) Post-modification balances in North America include $126 million of residential first mortgages and $25 million of home equity loans to borrowers who have gone through Chapter 7 bankruptcy in the three months ended June 30, 2013. These amounts include $82 million of residential first mortgages and $22 million of home equity loans that are newly classified as TDRs in the three months ended June 30, 2013 as a result of OCC guidance, as described above.

(8) The above tables reflect activity for loans outstanding as of the end of the reporting period that were considered TDRs.



	At and for the six months ended June 30, 2014
In millions of dollars except number of loans modified	Number of loans modified	Post- modification recorded investment⁽¹⁾⁽²⁾		Deferred principal⁽³⁾		Contingent principal forgiveness⁽⁴⁾		Principal forgiveness⁽⁵⁾		Average interest rate reduction
North America
Residential first mortgages	10,347	$	1,219	$	28	$	19	$	5	1	%
Home equity loans	4,060	147		2		—		11		2
Credit cards	87,726	390		—		—		—		15
Installment and other revolving	23,314	174		—		—		—		6
Commercial markets⁽⁶⁾	91	22		—		—		—		—
Total⁽⁸⁾	125,538	$	1,952	$	30	$	19	$	16
International
Residential first mortgages	1,286	$	49	$	—	$	—	$	1	1	%
Home equity loans	38	6		—		—		—		—
Credit cards	106,357	291		—		—		19		21
Installment and other revolving	37,904	158		—		—		7		12
Commercial markets⁽⁶⁾	220	134		—		—		—		1
Total⁽⁸⁾	145,805	$	638	$	—	$	—	$	27



	At and for the six months ended June 30, 2013
In millions of dollars except number of loans modified	Number of loans modified	Post- modification recorded investment⁽¹⁾⁽²⁾		Deferred principal⁽³⁾		Contingent principal forgiveness⁽⁴⁾		Principal forgiveness⁽⁵⁾		Average interest rate reduction
North America
Residential first mortgages	18,382	$	2,454	$	17	$	2	$	102	1	%
Home equity loans	7,357	370		1		—		38		1
Credit cards	79,761	406		—		—		—		14
Installment and other revolving	21,941	159		—		—		—		6
Commercial markets⁽⁶⁾	122	19		—		—		—		—
Total⁽⁸⁾	127,563	$	3,408	$	18	$	2	$	140
International
Residential first mortgages	2,181	$	105	$	—	$	—	$	1	1	%
Home equity loans	4			—		—		—		—
Credit cards	66,571	270		—		—		6		15
Installment and other revolving	27,487	179		—		—		4		8
Commercial markets⁽⁶⁾	208	46		1		—		—		—
Total⁽⁸⁾	96,451	$	600	$	1	$	—	$	11


(1)	Post-modification balances include past due amounts that are capitalized at modification date.

(2)

Post-modification balances in North America include $145 million of residential first mortgages and $37 million of home equity loans to borrowers who have gone through Chapter 7 bankruptcy in the six months ended June 30, 2014. These amounts include $87 million of residential first mortgages and $31 million of home equity loans that are newly classified as TDRs as a result of OCC guidance received in the six months ended June 30, 2014, as described above.


(3)	Represents portion of contractual loan principal that is non-interest bearing but still due from the borrower. Such deferred principal is charged off at the time of permanent modification to the extent that the related loan balance exceeds the underlying collateral value.


(4)	Represents portion of contractual loan principal that is non-interest bearing and, depending upon borrower performance, eligible for forgiveness.


(5)	Represents portion of contractual loan principal that was forgiven at the time of permanent modification.

(6) Commercial markets loans are generally borrower-specific modifications and incorporate changes in the amount and/or timing of principal and/or interest.

(7) Post-modification balances in North America include $249 million of residential first mortgages and $45 million of home equity loans to borrowers who have gone through Chapter 7 bankruptcy in the six months ended June 30, 2013. These amounts include $178 million of residential first mortgages and $38 million of home equity loans that are newly classified as TDRs as a result of OCC guidance received in the six months ended June 30, 2013, as described above.

(8) The above tables reflect activity for loans outstanding as of the end of the reporting period that were considered TDRs.

The following table presents consumer TDRs that defaulted during the three months and six months ended June 30, 2014 and 2013, for which the payment default occurred within one year of a permanent modification. Default is defined as 60 days past due, except for classifiably managed commercial markets loans, where default is defined as 90 days past due.



	Three Months Ended June 30,				Six Months Ended June 30,
In millions of dollars	2014		2013		2014		2013
North America
Residential first mortgages	$	168	$	391	$	413	$	781
Home equity loans	17		47		40		103
Credit cards	48		49		99		114
Installment and other revolving	21		19		40		42
Commercial markets	1		2		7		2
Total	$	255	$	508	$	599	$	1,042
International
Residential first mortgages	$	6	$	18	$	13	$	35
Home equity loans	—		—		—		—
Credit cards	69		61		139		113
Installment and other revolving	29		28		58		57
Commercial markets	95		2		100		4
Total	$	199	$	109	$	310	$	209

Corporate Loans

Corporate loans represent loans and leases managed by the Institutional Clients Group in Citicorp or, to a much lesser extent, in Citi Holdings. The following table presents information by corporate loan type as of June 30, 2014 and December 31, 2013:



In millions of dollars	June 30, 2014			December 31, 2013
Corporate
In U.S. offices
Commercial and industrial	$	36,293		$	32,704
Financial institutions	29,195			25,102
Mortgage and real estate⁽¹⁾	31,417			29,425
Installment, revolving credit and other	32,646			34,434
Lease financing	1,668			1,647
	$	131,219		$	123,312
In offices outside the U.S.
Commercial and industrial	$	82,945		$	82,663
Financial institutions	40,541			38,372
Mortgage and real estate⁽¹⁾	6,309			6,274
Installment, revolving credit and other	20,095			18,714
Lease financing	430			527
Governments and official institutions	2,176			2,341
	$	152,496		$	148,891
Total Corporate loans	$	283,715		$	272,203
Net unearned income	(556		)	(562		)
Corporate loans, net of unearned income	$	283,159		$	271,641


(1)	Loans secured primarily by real estate.

The Company sold and/or reclassified (to held-for-sale) $1.4 billion and $2.5 billion of corporate loans during the three and six months ended June 30, 2014, respectively and $1.2 billion and $2.2 billion during the three and six months ended June 30, 2013, respectively. The Company did not have significant purchases of corporate loans classified as held-for-investment for the three and six months ended June 30, 2014 or 2013.

Corporate loans are identified as impaired and placed on a cash (non-accrual) basis when it is determined, based on actual experience and a forward-looking assessment of the collectability of the loan in full, that the payment of interest or principal is doubtful or when interest or principal is 90 days past due, except when the loan is well collateralized and in the process of collection. Any interest accrued on impaired corporate loans and leases is reversed at 90 days and charged against current earnings, and interest is thereafter included in earnings only to the extent actually received in cash. When there is doubt regarding the ultimate collectability of principal, all cash receipts are thereafter applied to reduce the recorded investment in the loan. While corporate loans are generally managed based on their internally assigned risk rating (see further discussion below), the following tables present delinquency information by corporate loan type as of June 30, 2014 and December 31, 2013.

Corporate Loan Delinquency and Non-Accrual Details at June 30, 2014



In millions of dollars	30-89 days past due and accruing⁽¹⁾		≥ 90 days past due and accruing⁽¹⁾		Total past due and accruing		Total non-accrual⁽²⁾		Total current⁽³⁾		Total loans ⁽⁴⁾
Commercial and industrial	$	229	$	1	$	230	$	618	$	116,070	$	116,918
Financial institutions	—		—		—		257		67,475		67,732
Mortgage and real estate	111		185		296		242		37,084		37,622
Leases	9		—		9		49		2,038		2,096
Other	52		28		80		52		53,901		54,033
Loans at fair value											4,758
Total	$	401	$	214	$	615	$	1,218	$	276,568	$	283,159


(1)	Corporate loans that are 90 days past due are generally classified as non-accrual. Corporate loans are considered past due when principal or interest is contractually due but unpaid.


(2)	Citi generally does not manage corporate loans on a delinquency basis. Non-accrual loans generally include those loans that are ≥ 90 days past due or those loans for which Citi believes, based on actual experience and a forward-looking assessment of the collectability of the loan in full, that the payment of interest or principal is doubtful.


(3)	Corporate loans are past due when principal or interest is contractually due but unpaid. Loans less than 30 days past due are presented as current.


(4)	Total loans include loans at fair value, which are not included in the various delinquency columns.

Corporate Loan Delinquency and Non-Accrual Details at December 31, 2013



In millions of dollars	30-89 days past due and accruing⁽¹⁾		≥ 90 days past due and accruing⁽¹⁾		Total past due and accruing		Total non-accrual⁽²⁾		Total current⁽³⁾		Total loans ⁽⁴⁾
Commercial and industrial	$	72	$	5	$	77	$	769	$	112,985	$	113,831
Financial institutions	—		—		—		365		61,704		62,069
Mortgage and real estate	183		175		358		515		34,027		34,900
Leases	9		1		10		189		1,975		2,174
Other	47		2		49		70		54,476		54,595
Loans at fair value											4,072
Total	$	311	$	183	$	494	$	1,908	$	265,167	$	271,641


(1)	Corporate loans that are 90 days past due are generally classified as non-accrual. Corporate loans are considered past due when principal or interest is contractually due but unpaid.


(2)	Citi generally does not manage corporate loans on a delinquency basis. Non-accrual loans generally include those loans that are ≥ 90 days past due or those loans for which Citi believes, based on actual experience and a forward-looking assessment of the collectability of the loan in full, that the payment of interest or principal is doubtful.


(3)	Corporate loans are past due when principal or interest is contractually due but unpaid. Loans less than 30 days past due are presented as current.


(4)	Total loans include loans at fair value, which are not included in the various delinquency columns.

Citigroup has a risk management process to monitor, evaluate and manage the principal risks associated with its corporate loan portfolio. As part of its risk management process, Citi assigns numeric risk ratings to its corporate loan facilities based on quantitative and qualitative assessments of the obligor and facility. These risk ratings are reviewed at least annually or more often if material events related to the obligor or facility warrant. Factors considered in assigning the risk ratings include: financial condition of the obligor, qualitative assessment of management and strategy, amount and sources of repayment, amount and type of collateral and guarantee arrangements, amount and type of any contingencies associated with the obligor, and the obligor’s industry and geography.

The obligor risk ratings are defined by ranges of default probabilities. The facility risk ratings are defined by ranges of loss norms, which are the product of the probability of default and the loss given default. The investment grade rating categories are similar to the category BBB-/Baa3 and above as defined by S&P and Moody’s. Loans classified according to the bank regulatory definitions as special mention, substandard and doubtful will have risk ratings within the non-investment grade categories.

Corporate Loans Credit Quality Indicators at June 30, 2014 and December 31, 2013



	Recorded investment in loans⁽¹⁾
In millions of dollars	June 30, 2014		December 31, 2013
Investment grade⁽²⁾
Commercial and industrial	$	83,110	$	79,360
Financial institutions	52,123		49,699
Mortgage and real estate	15,460		13,178
Leases	1,553		1,600
Other	49,824		51,370
Total investment grade	$	202,070	$	195,207
Non-investment grade⁽²⁾
Accrual
Commercial and industrial	$	33,190	$	33,702
Financial institutions	15,352		12,005
Mortgage and real estate	4,184		4,205
Leases	494		385
Other	4,157		3,155
Non-accrual
Commercial and industrial	618		769
Financial institutions	257		365
Mortgage and real estate	242		515
Leases	49		189
Other	52		70
Total non-investment grade	$	58,595	$	55,360
Private Banking loans managed on a delinquency basis ⁽²⁾	$	17,736	$	17,002
Loans at fair value	4,758		4,072
Corporate loans, net of unearned income	$	283,159	$	271,641


(1)	Recorded investment in a loan includes net deferred loan fees and costs, unamortized premium or discount, less any direct write-downs.


(2)	Held-for-investment loans are accounted for on an amortized cost basis.

Corporate loans and leases identified as impaired and placed on non-accrual status are written down to the extent that principal is judged to be uncollectible. Impaired collateral-dependent loans and leases, where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment, are written down to the lower of cost or collateral value, less cost to sell. Cash-basis loans are returned to an accrual status when all contractual principal and interest amounts are reasonably assured of repayment and there is a sustained period of repayment performance, generally six months, in accordance with the contractual terms of the loan.

The following tables present non-accrual loan information by corporate loan type at June 30, 2014 and December 31, 2013 and interest income recognized on non-accrual corporate loans for the three- and six-month periods ended June 30, 2014 and 2013, respectively:

Non-Accrual Corporate Loans



									Three Months Ended June 30, 2014		Six Months Ended June 30, 2014
	June 30, 2014
In millions of dollars	Recorded investment⁽¹⁾		Unpaid principal balance		Related specific allowance		Average carrying value⁽²⁾		Interest income recognized⁽³⁾		Interest income recognized⁽³⁾
Non-accrual Corporate loans
Commercial and industrial	$	618	$	979	$	119	$	776	$	9	$	14
Financial institutions	257		277		1		325		—		4
Mortgage and real estate	242		282		17		415		6		7
Lease financing	49		50		29		154		—		—
Other	52		188		17		61		—		—
Total non-accrual Corporate loans	$	1,218	$	1,776	$	183	$	1,731	$	15	$	25



	Balance at December 31, 2013
In millions of dollars	Recorded investment⁽¹⁾		Unpaid principal balance		Related specific allowance		Average carrying value⁽²⁾
Non-accrual Corporate loans
Commercial and industrial	$	769	$	1,074	$	79	$	967
Financial institutions	365		382		3		378
Mortgage and real estate	515		651		35		585
Lease financing	189		190		131		189
Other	70		216		20		64
Total non-accrual Corporate loans	$	1,908	$	2,513	$	268	$	2,183



	June 30, 2014				December 31, 2013
In millions of dollars	Recorded investment⁽¹⁾		Related specific allowance		Recorded investment⁽¹⁾		Related specific allowance
Non-accrual Corporate loans with valuation allowances
Commercial and industrial	$	301	$	119	$	401	$	79
Financial institutions	7		1		24		3
Mortgage and real estate	33		17		253		35
Lease financing	47		29		186		131
Other	46		17		61		20
Total non-accrual Corporate loans with specific allowance	$	434	$	183	$	925	$	268
Non-accrual Corporate loans without specific allowance
Commercial and industrial	$	316			$	368
Financial institutions	250				341
Mortgage and real estate	209				262
Lease financing	2				3
Other	7				9
Total non-accrual Corporate loans without specific allowance	$	784	N/A		$	983	N/A


(1)	Recorded investment in a loan includes net deferred loan fees and costs, unamortized premium or discount, less any direct write-downs.


(2)	Average carrying value represents the average recorded investment balance and does not include related specific allowance.


(3)	Interest income recognized for the three- and six-month periods ended June 30, 2013 was $10 million and $18 million, respectively.

N/A Not Applicable

Corporate Troubled Debt Restructurings

The following table presents corporate TDR activity at and for the three months ended June 30, 2014.



In millions of dollars	Carrying Value		TDRs involving changes in the amount and/or timing of principal payments⁽¹⁾		TDRs involving changes in the amount and/or timing of interest payments⁽²⁾		TDRs involving changes in the amount and/or timing of both principal and interest payments		Balance of principal forgiven or deferred		Net P&L impact⁽³⁾
Commercial and industrial	$	7	$	7	$	—	$	—	$	—	$	—
Financial institutions	—		—		—		—		—		—
Mortgage and real estate	1		—		1		—		—		—
Other	—		—		—		—		—		—
Total	$	8	$	7	$	1	$	—	$	—	$	—


(1)	TDRs involving changes in the amount or timing of principal payments may involve principal forgiveness or deferral of periodic and/or final principal payments.


(2)	TDRs involving changes in the amount or timing of interest payments may involve a below-market interest rate.


(3)	Balances reflect charge-offs and reserves recorded during the three months ended June 30, 2014 on loans subject to a TDR during the period then ended.

The following table presents corporate TDR activity at and for the three months ended June 30, 2013.



In millions of dollars	Carrying Value		TDRs involving changes in the amount and/or timing of principal payments⁽¹⁾		TDRs involving changes in the amount and/or timing of interest payments⁽²⁾		TDRs involving changes in the amount and/or timing of both principal and interest payments		Balance of principal forgiven or deferred		Net P&L impact⁽³⁾
Commercial and industrial	$	42	$	14	$	28	$	—	$	—	$	—
Financial institutions	—		—		—		—		—		—
Mortgage and real estate	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	42	$	14	$	28	$	—	$	—	$	—


(1)	TDRs involving changes in the amount or timing of principal payments may involve principal forgiveness or deferral of periodic and/or final principal payments.


(2)	TDRs involving changes in the amount or timing of interest payments may involve a below-market interest rate.


(3)	Balances reflect charge-offs and reserves recorded during the three months ended June 30, 2013 on loans subject to a TDR during the period then ended.

The following table presents corporate TDR activity at and for the six months ended June 30, 2014.



In millions of dollars	Carrying Value		TDRs involving changes in the amount and/or timing of principal payments⁽¹⁾		TDRs involving changes in the amount and/or timing of interest payments⁽²⁾		TDRs involving changes in the amount and/or timing of both principal and interest payments		Balance of principal forgiven or deferred		Net P&L impact⁽³⁾
Commercial and industrial	$	47	$	30	$	17	$	—	$	—	$	—
Financial institutions	—		—		—		—		—		—
Mortgage and real estate	5		4		1		—		—		—
Other	—		—		—		—		—		—
Total	$	52	$	34	$	18	$	—	$	—	$	—


(1)	TDRs involving changes in the amount or timing of principal payments may involve principal forgiveness or deferral of periodic and/or final principal payments.


(2)	TDRs involving changes in the amount or timing of interest payments may involve a below-market interest rate.


(3)	Balances reflect charge-offs and reserves recorded during the six months ended June 30, 2014 on loans subject to a TDR during the period then ended.

The following table presents corporate TDR activity at and for the six months ended June 30, 2013.



In millions of dollars	Carrying Value		TDRs involving changes in the amount and/or timing of principal payments⁽¹⁾		TDRs involving changes in the amount and/or timing of interest payments⁽²⁾		TDRs involving changes in the amount and/or timing of both principal and interest payments		Balance of principal forgiven or deferred		Net P&L impact⁽³⁾
Commercial and industrial	$	89	$	55	$	28	$	6	$	—	$	—
Financial institutions
Mortgage and real estate	14		—		14		—		—		—
Other	$	4	$	—	$	—	$	4	$	—	$	—
Total	$	107	$	55	$	42	$	10	$	—	$	—


(1)	TDRs involving changes in the amount or timing of principal payments may involve principal forgiveness or deferral of periodic and/or final principal payments.


(2)	TDRs involving changes in the amount or timing of interest payments may involve a below-market interest rate.


(3)	Balances reflect charge-offs and reserves recorded during the six months ended June 30, 2013 on loans subject to a TDR during the period then ended.

The following table presents total corporate loans modified in a TDR at June 30, 2014 and 2013, as well as those TDRs that defaulted during the three months ended June 30, 2014 and 2013, and for which the payment default occurred within one year of a permanent modification. Default is defined as 60 days past due, except for classifiably managed commercial markets loans, where default is defined as 90 days past due.



	TDR balances at		TDR loans in payment default during the three months ended		TDR loans in payment default six months ended		TDR balances at		TDR loans in payment default during the three months ended		TDR loans in payment default six months ended
In millions of dollars	June 30, 2014		June 30, 2014		June 30, 2014		June 30, 2013		June 30, 2013		June 30, 2013
Commercial and industrial	$	203	$	—	$	—	$	173	$	—	$	15
Loans to financial institutions	—		—		—		16		—		—
Mortgage and real estate	130		—		—		218		2		2
Other	340		—		—		418		—		—
Total	$	673	$	—	$	—	$	825	$	2	$	17