10-K 1 c-12312015x10k.htm 10-K 10-K
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
Commission file number 1-9924
Citigroup Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
 
52-1568099
(I.R.S. Employer Identification No.)
388 Greenwich Street, New York, NY
(Address of principal executive offices)
 
10013
(Zip code)
(212) 559-1000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: See Exhibit 99.01

Securities registered pursuant to Section 12(g) of the Act: none

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
 
Accelerated filer o
 
Non-accelerated filer o
 (Do not check if a smaller reporting company)
 
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No x
The aggregate market value of Citigroup Inc. common stock held by non-affiliates of Citigroup Inc. on June 30, 2015 was approximately $166.1 billion.
Number of shares of Citigroup Inc. common stock outstanding on January 31, 2016: 2,948,120,153
Documents Incorporated by Reference: Portions of the registrant’s proxy statement for the annual meeting of stockholders scheduled to be held on April 26, 2016, are incorporated by reference in this Form 10-K in response to Items 10, 11, 12, 13 and 14 of Part III.
Available on the web at www.citigroup.com
 




FORM 10-K CROSS-REFERENCE INDEX
 
 
 
 
Item Number
Page
 
 
 
 
Part I
 
 
 
 
 
1.
 
Business
2–30, 120–122,
 
 
 
125, 152,
 
 
 
309–310
 
 
 
 
1A.
 
Risk Factors
54–63
 
 
 
 
1B.
 
Unresolved Staff Comments
Not Applicable
 
 
 
 
2.
 
Properties
309–310
 
 
 
 
3.
 
Legal Proceedings—See Note 28 to the Consolidated Financial Statements
286–296
 
 
 
 
4.
 
Mine Safety Disclosures
Not Applicable
 
 
 
 
Part II
 
 
 
 
 
5.
 
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
134–135, 157–158 311–312
 
 
 
 
6.
 
Selected Financial Data
8–9
 
 
 
 
7.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
5–32, 65–119
 
 
 
 
7A.
 
Quantitative and Qualitative Disclosures About Market Risk
65–119, 153–155, 181–218, 225–279
 
 
 
 
8.
 
Financial Statements and Supplementary Data
129–308
 
 
 
 
9.
 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not Applicable
 
 
 
 
9A.
 
Controls and Procedures
123–124
 
 
 
 
9B.
 
Other Information
Not Applicable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part III
 
 
 
 
 
10.
 
Directors, Executive Officers and Corporate Governance
313–314*
 
 
 
 
11.
 
Executive Compensation
**
 
 
 
 
12.
 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
***
 
 
 
 
13.
 
Certain Relationships and Related Transactions and Director Independence
****
 
 
 
 
14.
 
Principal Accountant Fees and Services
*****
 
 
 
 
 
 
 
 
Part IV
 
 
 
 
 
15.
 
Exhibits and Financial Statement Schedules
315–319

*
For additional information regarding Citigroup’s Directors, see “Corporate Governance,” “Proposal 1: Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the definitive Proxy Statement for Citigroup’s Annual Meeting of Stockholders scheduled to be held on April 26, 2016, to be filed with the SEC (the Proxy Statement), incorporated herein by reference.
**
See “Compensation Discussion and Analysis,” “The Personnel and Compensation Committee Report,” and “2015 Summary Compensation Table and Compensation Information”
in the Proxy Statement, incorporated herein by reference.
***
See “About the Annual Meeting,” “Stock Ownership” and “Proposal 4: Approval of Additional Authorized Shares under the Citigroup 2014 Stock Incentive Plan” including Annex B, “Equity Compensation Plan Information” in the Proxy Statement, incorporated herein by reference.
****
See “Corporate Governance—Director Independence,” “—Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation,” and “—Indebtedness” in the Proxy Statement, incorporated herein by reference.
*****
See “Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm” in the Proxy Statement, incorporated herein by reference.






CITIGROUP’S 2015 ANNUAL REPORT ON FORM 10-K
OVERVIEW
MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS
Executive Summary
Summary of Selected Financial Data
SEGMENT AND BUSINESS—INCOME (LOSS)
  AND REVENUES
SEGMENT BALANCE SHEET
CITICORP
Global Consumer Banking (GCB)
North America GCB
Latin America GCB
Asia GCB
Institutional Clients Group
Corporate/Other
CITI HOLDINGS
OFF-BALANCE SHEET
  ARRANGEMENTS
CONTRACTUAL OBLIGATIONS
CAPITAL RESOURCES
RISK FACTORS
Managing Global Risk Table of Contents
MANAGING GLOBAL RISK
SIGNIFICANT ACCOUNTING POLICIES AND
  SIGNIFICANT ESTIMATES
DISCLOSURE CONTROLS AND
  PROCEDURES
MANAGEMENT’S ANNUAL REPORT ON
  INTERNAL CONTROL OVER FINANCIAL
  REPORTING
FORWARD-LOOKING STATEMENTS
REPORT OF INDEPENDENT REGISTERED
  PUBLIC ACCOUNTING FIRM—INTERNAL
  CONTROL OVER FINANCIAL REPORTING
REPORT OF INDEPENDENT REGISTERED
  PUBLIC ACCOUNTING FIRM—
  CONSOLIDATED FINANCIAL STATEMENTS
 
 
FINANCIAL STATEMENTS AND NOTES
  TABLE OF CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
FINANCIAL DATA SUPPLEMENT
SUPERVISION, REGULATION AND OTHER
CORPORATE INFORMATION
Citigroup Executive Officers
Citigroup Board of Directors


1



OVERVIEW

Citigroup’s history dates back to the founding of the City
Bank of New York in 1812.
Citigroup is a global diversified financial services holding company, whose businesses provide 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, trade and securities services and wealth management. Citi has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions.
At December 31, 2015, Citi had approximately 231,000 full-time employees, compared to approximately 241,000 full-time employees at December 31, 2014.
Citigroup currently operates, for management reporting purposes, via two primary business segments: Citicorp, consisting of Citi’s Global Consumer Banking businesses and Institutional Clients Group; and Citi Holdings, consisting of businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp businesses. For a further description of the business segments and the products and services they provide, see “Citigroup Segments” below, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 3 to the Consolidated Financial Statements.
Throughout this report, “Citigroup,” “Citi” and “the Company” refer to Citigroup Inc. and its consolidated subsidiaries.
Additional information about Citigroup is available on Citi’s website at www.citigroup.com. Citigroup’s recent annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy statements, as well as other filings with the U.S. Securities and Exchange Commission (SEC), are available free of charge through Citi’s website by clicking on the “Investors” page and selecting “All SEC Filings.” The SEC’s website also contains current reports, information statements, and other information regarding Citi at www.sec.gov.
Certain reclassifications, including a realignment of certain businesses, have been made to the prior periods’ financial statements to conform to the current period’s presentation. For information on certain recent such reclassifications, see Note 3 to the Consolidated Financial Statements.


Please see “Risk Factors” below for a discussion of the most significant risks and uncertainties that could impact Citigroup’s businesses, financial condition and results of operations.



 




2




As described above, Citigroup is managed pursuant to the following segments:
(Chart continues on next page.)


3





The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results above.
* As previously announced, Citigroup intends to exit its consumer businesses in Brazil, Argentina and Colombia. Effective in the first quarter of 2016, these businesses, which previously have been reported as part of Latin America GCB, will be reported as part of Citi Holdings. For additional information, see “Citicorp” below. Citi intends to release a revised Quarterly Financial Data Supplement reflecting this realignment prior to the release of its first quarter of 2016 earnings information.

(1)
For reporting purposes, Asia GCB includes the results of operations of EMEA GCB for all periods presented.
(2)
North America includes the U.S., Canada and Puerto Rico, Latin America includes Mexico and Asia includes Japan.

4



MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

Citi’s full year 2015 results of operations reflected a solid overall performance. As described in more detail throughout this Executive Summary, Citi’s full year 2015 net income of $17.1 billion was its highest since pre-financial crisis, when Citi was a very different company in terms of footprint, mix of businesses and assets. During the year, Citi was able to grow revenues by 3% and make investments in its core Citicorp businesses while reducing its overall expenses, thus improving its overall efficiency ratio. Loan and deposit growth in Citicorp each grew by 5% while Citi’s overall balance sheet decreased by 3% (each excluding the impact of foreign currency translation into U.S. dollars for reporting purposes (FX translation)). Citi also ended 2015 with a Common Equity Tier 1 Capital ratio, on a fully implemented basis, of 12.1%.
In addition to these accomplishments, Citi made significant progress on its execution priorities during 2015, including:

Efficient resource allocation and disciplined expense management: As described above, Citi maintained disciplined expense management during 2015, even as it continued to absorb increased regulatory and compliance costs in Citicorp and made ongoing business investments. Citi’s expense management during 2015 was further aided by lower legal and related expenses and lower repositioning expenses in Citicorp as compared to the prior year, as discussed further below.
Continued wind down of Citi Holdings, while maintaining profitability: Citi significantly reduced the assets in Citi Holdings during the year. Citi Holdings’ assets decreased $55 billion, or 43%, from 2014, ending the year at $74 billion. In addition, as of December 31, 2015, Citi had executed agreements to further reduce Citi Holdings GAAP assets by approximately $7 billion in 2016 (for additional information, see “Citi Holdings” below). As discussed further below, Citi Holdings also maintained profitability in 2015.
Utilization of deferred tax assets (DTAs): Citi utilized approximately $1.5 billion in DTAs during 2015 (for additional information, see “Significant Accounting Policies and Significant Estimates—Income Taxes” below and Note 9 to the Consolidated Financial Statements).

Citi was able to achieve these results and make ongoing progress on its execution priorities during a year with market volatility and uncertainties, including macroeconomic uncertainties, slower global growth and market volatility resulting from, among other things, lower commodity prices as well as uncertainty regarding the timing and pace of U.S. interest rate changes.
As the year-to-date has shown, Citi expects the operating environment in 2016 to remain challenging, with many of the uncertainties impacting its results of operations during 2015
 
continuing into 2016. For a more detailed discussion of the risks and uncertainties that could impact Citi’s businesses, results of operations and financial condition during 2016, see each respective business’ results of operations, “Risk Factors” and “Managing Global Risk” below. While Citi may not be able to control all aspects of its operating environment in 2016, it intends to continue to build on the progress made during 2015 by remaining focused on its execution priorities and target client strategy.

2015 Summary Results

Citigroup
Citigroup reported net income of $17.2 billion or $5.40 per share, compared to $7.3 billion or $2.20 per share in the prior year. Results in 2015 included $254 million ($162 million after-tax) of CVA/DVA, compared to negative $390 million (negative $240 million after-tax) in 2014. Citigroup full year 2014 results also included a charge of $3.8 billion ($3.7 billion after-tax) to settle RMBS and CDO-related claims recorded in Citi Holdings and a tax charge of $210 million related to corporate tax reforms recorded in Corporate/Other.
Excluding the impact of CVA/DVA in both periods as well as the impact of the mortgage settlement and the tax item in 2014, Citigroup reported net income of $17.1 billion in 2015, or $5.35 per share, compared to $11.5 billion, or $3.55 per share, in the prior year. (Citi’s results of operations excluding the impact of CVA/DVA as well as the impact of the mortgage settlement and the tax item in 2014 are non-GAAP financial measures. Citi believes the presentation of its results
of operations excluding these impacts provides a more meaningful depiction for investors of the underlying fundamentals of its businesses.) The 49% increase from the prior year was primarily driven by lower expenses and lower net credit losses, partially offset by lower revenues and a reduced net loan loss reserve release.
Citi’s revenues were $76.4 billion in 2015, a decrease of 1% from the prior year. Excluding CVA/DVA, revenues were $76.1 billion, down 2% from the prior year, as Citicorp revenues decreased by 2% and Citi Holdings revenues decreased 1%. Excluding CVA/DVA and the impact of FX translation, Citigroup revenues increased 3% from the prior year, driven by an increase of 3% in both Citicorp and Citi Holdings’ revenues. (Citi’s results of operations excluding the impact of FX translation are non-GAAP financial measures. Citi believes the presentation of its results of operations excluding the impact of FX translation provides a more meaningful depiction for investors of the underlying fundamentals of its businesses.)

Expenses
Citigroup expenses decreased 21% versus the prior year to $43.6 billion. Excluding the impact of the mortgage settlement in the prior year, Citigroup expenses declined 15% driven by significantly lower legal and related expenses ($1.5 billion compared to $5.8 billion in the prior year) and


5



repositioning costs ($472 million compared to $1.6 billion in the prior year), as well as the impact of FX translation (which lowered expenses by approximately $2.6 billion in 2015 compared to the prior year). Excluding the impact of both the mortgage settlement in the prior year and FX translation, Citigroup’s expenses declined 10%, mainly driven by the lower legal and related expenses and repositioning costs.
Excluding the impact of FX translation, which lowered reported expenses by approximately $2.4 billion in 2015 compared to the prior year, Citicorp expenses decreased 9% also driven by significantly lower legal and related expenses and repositioning costs. Citicorp expenses in 2015 included legal and related expenses of $1.1 billion, compared to $4.8 billion in the prior year, and $278 million of repositioning costs, compared to $1.5 billion in the prior year.
Citi Holdings’ expenses were $4.6 billion, down 52% from the prior year. Excluding the impact of the mortgage settlement in the prior year, Citi Holdings’ expenses decreased 22%, primarily driven by the ongoing decline in Citi Holdings assets as well as lower legal and related expenses.

Credit Costs
Citi’s total provisions for credit losses and for benefits and claims of $7.9 billion increased 6% from the prior year. Excluding the impact of the mortgage settlement in the prior year, Citi’s total provisions for credit losses and for benefits and claims increased 7% as a lower net loan loss reserve release was partially offset by lower net credit losses.
Net credit losses of $7.3 billion declined 19% versus the prior year. Consumer net credit losses declined 19% to $7.1 billion, mostly reflecting continued improvements in North America Citi-branded cards and Citi retail services in Citicorp as well as the North America mortgage portfolio within Citi Holdings. Corporate net credit losses declined 19% to $234 million. As previously disclosed, corporate net credit losses in 2014 included approximately $165 million of net credit losses related to the Pemex supplier program in Mexico (for additional information, see “Institutional Clients Group” below). Excluding these net credit losses in the prior year, net credit losses increased by approximately $111 million, primarily related to a limited number of energy and energy-related corporate loans, predominantly incurred during the latter part of 2015 (for additional information, see “Institutional Clients Group” and “Credit Risk—Corporate Credit” below).
The net release of allowance for loan losses and unfunded lending commitments was $120 million in 2015, compared to a $2.4 billion release in 2014, excluding the impact of the mortgage settlement in the prior year. Citicorp’s net reserve build was $409 million, compared to a net loan loss reserve release of $1.4 billion in 2014. The build in 2015 was primarily driven by net loan loss reserve builds in Institutional Clients Group (ICG) during the latter part of 2015, including approximately $530 million for energy and energy-related exposures. Overall, Citi expects its credit costs in Citicorp will likely be higher in 2016 as compared to 2015 given that it believes the vast majority of its net loan loss reserve releases have occurred as credit quality has largely stabilized.
 
Citi Holdings’ net reserve release, excluding the impact of the mortgage settlement in the prior year, decreased $443 million from the prior year to $529 million, primarily reflecting lower net releases related to the North America mortgage portfolio.
For additional information on Citi’s consumer and corporate credit costs and allowance for loan losses, see “Credit Risk” below.

Capital
Citi continued to grow its regulatory capital during 2015, even as it returned approximately $5.9 billion of capital to its shareholders in the form of common stock repurchases and dividends. Citigroup’s Tier 1 Capital and Common Equity Tier 1 Capital ratios, on a fully implemented basis, were 13.5% and 12.1% as of December 31, 2015, respectively, compared to 11.5% and 10.6% as of December 31, 2014 (all based on the Basel III Advanced Approaches for determining risk-weighted assets). Citigroup’s Supplementary Leverage ratio as of December 31, 2015, on a fully implemented basis, was 7.1%, compared to 5.9% as of December 31, 2014. For additional information on Citi’s capital ratios and related components, including the impact of Citi’s DTAs on its capital ratios, see “Capital Resources” below.

Citicorp
Citicorp net income increased 50% from the prior year to $16.2 billion. CVA/DVA, recorded in ICG, was $269 million ($172 million after-tax) in 2015, compared to negative $343 million (negative $211 million after-tax) in the prior year (for a summary of CVA/DVA by business within ICG, see “Institutional Clients Group” below). Excluding CVA/DVA in both periods and the tax item in 2014, Citicorp’s net income was $16.0 billion, up 43% from the prior year, primarily driven by the lower expenses and net credit losses, partially offset by lower revenues and the net loan loss reserve builds.
Citicorp revenues decreased 1% from the prior year to $68.5 billion. Excluding CVA/DVA, Citicorp revenues were $68.2 billion in 2015, down 2% from the prior year, reflecting largely unchanged revenues in ICG and a 6% decrease in Global Consumer Banking (GCB) revenues. As referenced above, excluding CVA/DVA and the impact of FX translation, Citicorp’s revenues grew 3%.
GCB revenues of $33.9 billion decreased 6% versus the prior year. Excluding the impact of FX translation, GCB revenues decreased 1%, as decreases in North America GCB and Asia GCB were partially offset by an increase in Latin America GCB. North America GCB revenues decreased 1% to $19.4 billion, as lower revenues in Citi-branded cards were partially offset by higher retail banking revenues. Citi-branded cards revenues of $7.8 billion were down 6% versus the prior year, reflecting the continued impact of lower average loans as well as an increase in acquisition and rewards costs related to new account acquisitions, particularly during the second half of 2015. Citi retail services revenues of $6.4 billion were largely unchanged versus the prior year, as the continued impact of lower fuel prices and higher contractual partner payments was offset by modest growth in average loans. Retail banking revenues increased 6% from the prior


6



year to $5.2 billion, reflecting continued loan and deposit growth and improved deposit spreads. North America GCB average deposits of $172 billion increased 1% year-over-year and average retail loans of $50 billion grew 7%. Average card loans of $107 billion decreased 2%, while purchase sales of $263 billion increased 4% versus the prior year. For additional information on the results of operations of North America GCB for 2015, see “Global Consumer Banking North America GCB” below.
International GCB revenues (consisting of EMEA GCB, Latin America GCB and Asia GCB) decreased 12% versus the prior year to $14.4 billion. Excluding the impact of FX translation, international GCB revenues were unchanged versus the prior year. Latin America GCB revenues increased 3% versus the prior year, as increases in loan and deposit balances as well as the impact of business divestitures were partially offset by the continued impact of spread compression in cards. Asia GCB revenues declined 3% versus the prior year, reflecting lower investment sales revenues as well as continued high payment rates and the ongoing impact of regulatory changes in cards, partially offset by growth in lending, deposit and insurance products. For additional information on the results of operations of Latin America GCB and Asia GCB (which includes the results of operations of EMEA GCB for reporting purposes) for 2015, including the impact of FX translation, see “Global Consumer Banking” below. Year-over-year, international GCB average deposits of $129 billion increased 5%, average retail loans of $99 billion increased 3%, investment sales of $78 billion decreased 8%, average card loans of $26 billion increased 2% and card purchase sales of $101 billion increased 6%, all excluding the impact of FX translation.
ICG revenues were $33.7 billion in 2015, up 2% from the prior year. Excluding CVA/DVA, ICG revenues were largely unchanged from the prior year at $33.5 billion.
Banking revenues of $16.9 billion, excluding CVA/DVA and the impact of mark-to-market gains on hedges related to accrual loans within corporate lending (see below), were largely unchanged compared to the prior year, as lower equity underwriting activity within investment banking as well as the impact of FX translation was offset by higher advisory revenues and continued growth in the private bank. Investment banking revenues of $4.5 billion decreased 3% versus the prior year. Advisory revenues increased 16% to $1.1 billion with sustained wallet share gains for the year. Debt underwriting revenues increased 1% to $2.5 billion, driven by wallet share gains in investment grade debt and strong performance in investment grade loans in the second half of 2015, while equity underwriting revenues decreased 28% to $902 million, largely reflecting lower industry-wide underwriting activity during the year.
Private bank revenues, excluding CVA/DVA, increased 8% to $2.9 billion from the prior year, driven by higher loan and deposit balances as well as growth in managed investments revenue. Corporate lending revenues rose 8% to $2.0 billion, including $323 million of mark-to-market gains on hedges related to accrual loans compared to a $116 million gain in the prior year. Excluding the impact of FX translation and the mark-to-market impact of loan hedges, corporate
 
lending revenues increased 3% versus the prior year, as growth in average loans was partially offset by the impact of lower spreads. Treasury and trade solutions revenues of $7.8 billion were relatively unchanged versus the prior year. Excluding the impact of FX translation, treasury and trade solutions revenues increased 6%, as continued growth in deposit balances and spreads was partially offset by lower trade revenues.
Markets and securities services revenues of $16.3 billion, excluding CVA/DVA, decreased 1% from the prior year. Fixed income markets revenues of $11.3 billion, excluding CVA/DVA, decreased 7% from the prior year, as growth in rates and currencies was more than offset by a slowdown in spread products, reflecting the volatile trading environment during the year. Equity markets revenues of $3.1 billion, excluding CVA/DVA, increased 13% versus the prior year driven by growth across all products. Securities services revenues of $2.1 billion increased 4% versus the prior year, and increased 15% excluding the impact of FX translation, reflecting increased client activity and higher client balances. For additional information on the results of operations of ICG for 2015, see “Institutional Clients Group” below.
Corporate/Other revenues increased to $907 million from $301 million in the prior year, driven mainly by gains on debt buybacks during the course of 2015. For additional information on the results of operations of Corporate/Other in 2015, see “Corporate/Other” below.
Citicorp end-of-period loans increased 1% to $573 billion from the prior year, as a 5% increase in corporate loans was partially offset by a 2% decrease in consumer loans. Excluding the impact of FX translation, Citicorp loans grew 5%, with 8% growth in corporate loans and 2% growth in consumer loans.

Citi Holdings
Citi Holdings’ net income was $1.0 billion in 2015, compared to a net loss of $3.5 billion in the prior year. CVA/DVA was negative $15 million (negative $10 million after-tax) in 2015, compared to negative $47 million (negative $29 million after-tax) in the prior year. Excluding the impact of CVA/DVA in both periods and the impact of the mortgage settlement in the prior year, Citi Holdings’ net income was $1.1 billion, compared to $275 million in the prior year, primarily reflecting lower expenses and lower credit costs.
Citi Holdings’ revenues were largely unchanged from the prior year at $7.8 billion. Excluding CVA/DVA, Citi Holdings’ revenues decreased 1% to $7.9 billion from the prior year, primarily driven by the overall wind-down of the portfolio and the impact of redemptions of high cost debt, mostly offset by the impact of higher gains on asset sales. For additional information on the results of operations of Citi Holdings in 2015, see “Citi Holdings” below.
At the end of 2015, Citi Holdings’ assets were $74 billion, 43% below the prior year, and represented approximately 4% of Citi’s total GAAP assets. Citi Holdings’ risk-weighted assets were $133 billion as of December 31, 2015, a decrease of 30% from the prior year, and represented 11% of Citi’s risk-weighted assets under Basel III (based on the Advanced Approaches for determining risk-weighted assets).


7



RESULTS OF OPERATIONS
SUMMARY OF SELECTED FINANCIAL DATA—PAGE 1
Citigroup Inc. and Consolidated Subsidiaries
In millions of dollars, except per-share amounts and ratios
2015
2014
2013
2012
2011
Net interest revenue
$
46,630

$
47,993

$
46,793

$
46,686

$
47,649

Non-interest revenue
29,724

29,226

29,931

22,844

29,986

Revenues, net of interest expense
$
76,354

$
77,219

$
76,724

$
69,530

$
77,635

Operating expenses
43,615

55,051

48,408

50,036

50,180

Provisions for credit losses and for benefits and claims
7,913

7,467

8,514

11,329

12,359

Income from continuing operations before income taxes
$
24,826

$
14,701

$
19,802

$
8,165

$
15,096

Income taxes
7,440

7,197

6,186

397

4,020

Income from continuing operations
$
17,386

$
7,504

$
13,616

$
7,768

$
11,076

Income (loss) from discontinued operations, net of taxes(1)
(54
)
(2
)
270

(58
)
68

Net income before attribution of noncontrolling interests
$
17,332

$
7,502

$
13,886

$
7,710

$
11,144

Net income attributable to noncontrolling interests
90

192

227

219

148

Citigroup’s net income
$
17,242

$
7,310

$
13,659

$
7,491

$
10,996

Less:
 
 
 
 
 
Preferred dividends—Basic
$
769

$
511

$
194

$
26

$
26

Dividends and undistributed earnings allocated to employee restricted and deferred shares that contain nonforfeitable rights to dividends, applicable to basic EPS
224

111

263

164

184

Income allocated to unrestricted common shareholders for basic EPS
$
16,249

$
6,688

$
13,202

$
7,301

$
10,786

Add: Other adjustments to income

1

1

10

16

Income allocated to unrestricted common shareholders for diluted EPS
$
16,249

$
6,689

$
13,203

$
7,311

$
10,802

Earnings per share
 
 

 
 
 
Basic
 
 

 
 
 
Income from continuing operations
$
5.43

$
2.21

$
4.26

$
2.51

$
3.68

Net income
5.41

2.21

4.35

2.49

3.71

Diluted
 
 
 
 
 
Income from continuing operations
$
5.42

$
2.20

$
4.25

$
2.44

$
3.58

Net income
5.40

2.20

4.34

2.42

3.60

Dividends declared per common share
0.16

0.04

0.04

0.04

0.03


Statement continues on the next page, including notes to the table.

8



SUMMARY OF SELECTED FINANCIAL DATA—PAGE 2
 
Citigroup Inc. and Consolidated Subsidiaries
 
In millions of dollars, except per-share amounts, ratios and direct staff
2015
2014
2013
2012
2011
At December 31:
 
 
 
 
 
Total assets
$
1,731,210

$
1,842,181

$
1,880,035

$
1,864,328

$
1,873,597

Total deposits
907,887

899,332

968,273

930,560

865,936

Long-term debt
201,275

223,080

221,116

239,463

323,505

Citigroup common stockholders’ equity
205,139

199,717

197,254

186,155

177,213

Total Citigroup stockholders’ equity
221,857

210,185

203,992

188,717

177,525

Direct staff (in thousands)
231

241

251

259

266

Performance metrics
 
 
 
 
 
Return on average assets
0.95
%
0.39
%
0.73
%
0.39
%
0.56
%
Return on average common stockholders’ equity(2)
8.1

3.4

7.0

4.1

6.3

Return on average total stockholders’ equity(2)
7.9

3.5

6.9

4.1

6.3

Efficiency ratio (Total operating expenses/Total revenues)
57

71

63

72

65

Basel III ratios—full implementation
 
 
 
 
 
Common Equity Tier 1 Capital(3)
12.07
%
10.57
%
10.57
%
8.72
%
N/A

Tier 1 Capital(3)
13.49

11.45

11.23

9.03

N/A

Total Capital(3)
15.30

12.80

12.64

10.81

N/A

Supplementary Leverage ratio(4)
7.08

5.94

5.42

N/A

N/A

Citigroup common stockholders’ equity to assets
11.85
%
10.84
%
10.49
%
9.99
%
9.46
%
Total Citigroup stockholders’ equity to assets
12.82

11.41

10.85

10.12

9.48

Dividend payout ratio(5)
3.0

1.8

0.9

1.7

0.8

Book value per common share
$
69.46

$
66.05

$
65.12

$
61.46

$
60.61

Ratio of earnings to fixed charges and preferred stock dividends
2.89x

2.00x

2.18x

1.39x

1.61x

(1)
See Note 2 to the Consolidated Financial Statements for additional information on Citi’s discontinued operations.
(2)
The return on average common stockholders’ equity is calculated using net income less preferred stock dividends divided by average common stockholders’ equity. The return on average total Citigroup stockholders’ equity is calculated using net income divided by average Citigroup stockholders’ equity.
(3)
Capital ratios based on the U.S. Basel III rules, with full implementation assumed for capital components; risk-weighted assets based on the Advanced Approaches for determining total risk-weighted assets.
(4)
Citi’s Supplementary Leverage ratio is based on the U.S. Basel III rules, on a fully implemented basis.
(5) Dividends declared per common share as a percentage of net income per diluted share.
N/A Not applicable


9



SEGMENT AND BUSINESS—INCOME (LOSS) AND REVENUES
The following tables show the income (loss) and revenues for Citigroup on a segment and business view:
CITIGROUP INCOME
In millions of dollars
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Income (loss) from continuing operations
 
 
 
 
 
CITICORP
 
 
 
 
 
Global Consumer Banking
 
 
 
 
 
North America
$
4,255

$
4,412

$
3,918

(4
)%
13
 %
Latin America
928

1,158

1,251

(20
)
(7
)
Asia(1)
1,199

1,249

1,407

(4
)
(11
)
Total
$
6,382

$
6,819

$
6,576

(6
)%
4
 %
Institutional Clients Group


 
 




North America
$
3,621

$
4,113

$
3,081

(12
)%
33
 %
EMEA
2,288

2,034

2,554

12

(20
)
Latin America
1,328

1,345

1,606

(1
)
(16
)
Asia
2,214

2,042

2,184

8

(7
)
Total
$
9,451

$
9,534

$
9,425

(1
)%
1
 %
Corporate/Other
$
495

$
(5,375
)
$
(514
)
NM

NM

Total Citicorp
$
16,328

$
10,978

$
15,487

49
 %
(29
)%
Citi Holdings
$
1,058

$
(3,474
)
$
(1,871
)
NM

(86
)%
Income from continuing operations
$
17,386

$
7,504

$
13,616

NM

(45
)%
Discontinued operations
$
(54
)
$
(2
)
$
270

NM

NM

Net income attributable to noncontrolling interests
90

192

227

(53
)%
(15
)%
Citigroup’s net income
$
17,242

$
7,310

$
13,659

NM

(46
)%

(1)
For reporting purposes, Asia GCB includes the results of operations of EMEA GCB for all periods presented.
NM Not meaningful

10



CITIGROUP REVENUES
In millions of dollars
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
CITICORP
 
 
 
 
 
Global Consumer Banking
 
 
 
 
 
North America
$
19,448

$
19,669

$
19,798

(1
)%
(1
)%
Latin America
7,323

8,460

8,576

(13
)
(1
)
Asia(1)
7,091

7,888

7,931

(10
)
(1
)
Total
$
33,862

$
36,017

$
36,305

(6
)%
(1
)%
Institutional Clients Group
 
 
 


 
North America
$
13,105

$
12,940

$
11,434

1
 %
13
 %
EMEA
9,799

9,415

10,061

4

(6
)
Latin America
3,918

4,098

4,675

(4
)
(12
)
Asia
6,926

6,599

7,152

5

(8
)
Total
$
33,748

$
33,052

$
33,322

2
 %
(1
)%
Corporate/Other
$
907

$
301

$
322

NM

(7
)%
Total Citicorp
$
68,517

$
69,370

$
69,949

(1
)%
(1
)%
Citi Holdings
$
7,837

$
7,849

$
6,775

 %
16
 %
Total Citigroup net revenues
$
76,354

$
77,219

$
76,724

(1
)%
1
 %
(1)
For reporting purposes, Asia GCB includes the results of operations of EMEA GCB for all periods presented.
NM Not meaningful


11



SEGMENT BALANCE SHEET(1) 
In millions of dollars
Global
Consumer
Banking
Institutional
Clients
Group
Corporate/Other
and
consolidating
eliminations(2)
Subtotal
Citicorp
Citi
Holdings
Citigroup
Parent
company-
issued
long-term
debt and
stockholders’
equity(3)
Total
Citigroup
consolidated
Assets
 
 
 
 
 
 
 
Cash and deposits with banks
$
11,389

$
60,557

$
60,285

$
132,231

$
866

$

$
133,097

Federal funds sold and securities borrowed or purchased under agreements to resell
127

218,336


218,463

1,212


219,675

Trading account assets
5,290

240,022

1,382

246,694

3,262


249,956

Investments
7,273

108,248

220,451

335,972

6,983


342,955

Loans, net of unearned income and
 
 
 
 
 
 

allowance for loan losses
277,323

284,871


562,194

42,797


604,991

Other assets
44,047

75,504

45,237

164,788

15,748


180,536

Liquidity assets(4)
48,148

223,811

(275,553
)
(3,594
)
3,594



Total assets
$
393,597

$
1,211,349

$
51,802

$
1,656,748

$
74,462

$

$
1,731,210

Liabilities and equity
 
 
 
 
 
 
 
Total deposits
$
301,438

$
587,336

$
12,058

$
900,832

$
7,055

$

$
907,887

Federal funds purchased and securities loaned or sold under agreements to repurchase
4,235

142,200


146,435

61


146,496

Trading account liabilities
3

116,633

41

116,677

835


117,512

Short-term borrowings
100

20,962


21,062

17


21,079

Long-term debt
1,891

31,924

21,307

55,122

3,996

142,157

201,275

Other liabilities
16,813

73,211

17,349

107,373

6,496


113,869

Net inter-segment funding (lending)(3)
69,117

239,083

(188
)
308,012

56,002

(364,014
)

Total liabilities
$
393,597

$
1,211,349

$
50,567

$
1,655,513

$
74,462

$
(221,857
)
$
1,508,118

Total equity


1,235

1,235


221,857

223,092

Total liabilities and equity
$
393,597

$
1,211,349

$
51,802

$
1,656,748

$
74,462

$

$
1,731,210


(1)
The supplemental information presented in the table above reflects Citigroup’s consolidated GAAP balance sheet by reporting segment as of December 31, 2015. The respective segment information depicts the assets and liabilities managed by each segment as of such date. While this presentation is not defined by GAAP, Citi believes that these non-GAAP financial measures enhance investors’ understanding of the balance sheet components managed by the underlying business segments, as well as the beneficial inter-relationships of the asset and liability dynamics of the balance sheet components among Citi’s business segments.
(2)
Consolidating eliminations for total Citigroup and Citigroup parent company assets and liabilities are recorded within the Corporate/Other segment.
(3)
The total stockholders’ equity and the majority of long-term debt of Citigroup reside in the Citigroup parent company Consolidated Balance Sheet. Citigroup allocates stockholders’ equity and long-term debt to its businesses through inter-segment allocations as shown above.
(4)
Represents the attribution of Citigroup’s liquidity assets (primarily consisting of cash and available-for-sale securities) to the various businesses based on Liquidity Coverage Ratio (LCR) assumptions.



12



CITICORP
Citicorp is Citigroup’s global bank for consumers and businesses and represents Citi’s core franchises. Citicorp is focused on providing best-in-class products and services to customers and leveraging Citigroup’s unparalleled global network, including many of the world’s emerging economies. Citicorp is physically present in approximately 100 countries, many for over 100 years, and offers services in over 160 countries and jurisdictions. Citi believes this global network provides a strong foundation for servicing the broad financial services needs of its large multinational clients and for meeting the needs of retail, private banking, commercial, public sector and institutional clients around the world.
Citicorp consists of the following operating businesses: Global Consumer Banking (which consists of consumer banking businesses in North America, EMEA, Latin America and Asia) and Institutional Clients Group (which includes Banking and Markets and securities services). Citicorp also includes Corporate/Other. At December 31, 2015, Citicorp had approximately $1.7 trillion of assets and $901 billion of deposits, representing approximately 96% of Citi’s total assets and 99% of Citi’s total deposits.
Consistent with its strategy to continue to efficiently allocate its resources and further simplify its Global Consumer Bank, in February 2016, Citi announced that it intends to exit its consumer businesses in Argentina, Brazil and Colombia. These consumer businesses, consisting of approximately $6 billion of assets, $5 billion of consumer loans and $3 billion of deposits as of December 31, 2015, contributed approximately $1.1 billion of revenues, $900 million of expenses and a net loss of $34 million in 2015. These businesses, which previously have been reported as part of Latin America GCB, will be reported as part of Citi Holdings beginning in the first quarter of 2016. See also “Citigroup Segments” above and “Citi Holdings” below. While Citi does not intend to exit its consumer businesses in Venezuela, these businesses are not significant, lending predominantly to support ICG activities, and will be reported as part of ICG beginning in the first quarter of 2016. Similarly, Citi’s remaining indirect investment in Banco de Chile will be reported as part of ICG beginning in the first quarter of 2016.

In millions of dollars except as otherwise noted
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Net interest revenue
$
42,926

$
43,402

$
42,445

(1
)%
2
 %
Non-interest revenue
25,591

25,968

27,504

(1
)
(6
)
Total revenues, net of interest expense
$
68,517

$
69,370

$
69,949

(1
)%
(1
)%
Provisions for credit losses and for benefits and claims
 
 
 


 
Net credit losses
$
6,236

$
7,136

$
7,199

(13
)%
(1
)%
Credit reserve build (release)
309

(1,238
)
(811
)
NM

(53
)
Provision for loan losses
$
6,545

$
5,898

$
6,388

11
 %
(8
)%
Provision for benefits and claims
107

144

167

(26
)
(14
)
Provision for unfunded lending commitments
100

(152
)
90

NM

NM

Total provisions for credit losses and for benefits and claims
$
6,752

$
5,890

$
6,645

15
 %
(11
)%
Total operating expenses
$
39,000

$
45,362

$
40,498

(14
)%
12
 %
Income from continuing operations before taxes
$
22,765

$
18,118

$
22,806

26
 %
(21
)%
Income taxes
6,437

7,140

7,319

(10
)
(2
)
Income from continuing operations
$
16,328

$
10,978

$
15,487

49
 %
(29
)%
Income (loss) from discontinued operations, net of taxes
(54
)
(2
)
270

NM

NM

Noncontrolling interests
79

186

211

(58
)
(12
)
Net income
$
16,195

$
10,790

$
15,546

50
 %
(31
)%
Balance sheet data (in billions of dollars)
 
 
 


 
Total end-of-period (EOP) assets
$
1,657

$
1,713

$
1,726

(3
)%
(1
)%
Average assets
1,712

1,753

1,711

(2
)
2

Return on average assets
0.95
%
0.62
%
0.91
%


 
Efficiency ratio
57

65

58



 
Total EOP loans
$
573

$
565

$
565

1


Total EOP deposits
901

883

900

2

(2
)
NM Not meaningful

13



GLOBAL CONSUMER BANKING
Global Consumer Banking (GCB) consists of Citigroup’s four geographical consumer banking businesses that provide traditional banking services to retail customers through retail banking, including commercial banking, and Citi-branded cards and Citi retail services (for additional information on these businesses, see “Citigroup Segments” above). GCB is a globally diversified business with 2,994 branches in 24 countries around the world as of December 31, 2015. At December 31, 2015, GCB had approximately $394 billion of assets and $301 billion of deposits.
GCB’s overall strategy is to leverage Citi’s global footprint and seek to be the preeminent bank for the emerging affluent and affluent consumers in large urban centers. In credit cards and in certain retail markets, Citi serves customers in a somewhat broader set of segments and geographies. Consistent with its strategy, since 2012, Citi has exited, or is in the process of exiting, 20 consumer markets and has reduced its branch footprint by 25% to focus its global presence.
In millions of dollars except as otherwise noted
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Net interest revenue
$
26,881

$
27,924

$
27,545

(4
)%
1
 %
Non-interest revenue
6,981

8,093

8,760

(14
)
(8
)
Total revenues, net of interest expense
$
33,862

$
36,017

$
36,305

(6
)%
(1
)%
Total operating expenses
$
18,264

$
19,951

$
19,801

(8
)%
1
 %
Net credit losses
$
6,029

$
6,860

$
7,017

(12
)%
(2
)%
Credit reserve build (release)
(318
)
(1,148
)
(654
)
72

(76
)
Provision (release) for unfunded lending commitments
5

(23
)
37

NM

NM

Provision for benefits and claims
107

144

167

(26
)
(14
)
Provisions for credit losses and for benefits and claims
$
5,823

$
5,833

$
6,567

 %
(11
)%
Income from continuing operations before taxes
$
9,775

$
10,233

$
9,937

(4
)%
3
 %
Income taxes
3,393

3,414

3,361

(1
)
2

Income from continuing operations
$
6,382

$
6,819

$
6,576

(6
)%
4
 %
Noncontrolling interests
9

25

14

(64
)
79

Net income
$
6,373

$
6,794

$
6,562

(6
)%
4
 %
Balance Sheet data (in billions of dollars)
 
 
 


 
Average assets
$
391

$
408

$
401

(4
)%
2
 %
Return on average assets
1.63
%
1.67
%
1.65
%


 
Efficiency ratio
54

55

55



 
Total EOP assets
$
394

$
406

$
413

(3
)
(2
)
Average deposits
300

305

299

(2
)
2

Net credit losses as a percentage of average loans
2.14
%
2.36
%
2.52
%


 
Revenue by business
 
 
 


 
Retail banking
$
14,777

$
15,461

$
15,991

(4
)%
(3
)%
Cards(1)
19,085

20,556

20,314

(7
)
1

Total
$
33,862

$
36,017

$
36,305

(6
)%
(1
)%
Income from continuing operations by business
 
 
 


 
Retail banking
$
1,989

$
1,787

$
1,897

11
 %
(6
)%
Cards(1)
4,393

5,032

4,679

(13
)
8

Total
$
6,382

$
6,819

$
6,576

(6
)%
4
 %
(Table continues on next page.)


14



Foreign currency (FX) translation impact
 
 
 
 
 
Total revenue—as reported
$
33,862

$
36,017

$
36,305

(6
)%
(1
)%
Impact of FX translation(2)

(1,969
)
(2,573
)


 
Total revenues—ex-FX
$
33,862

$
34,048

$
33,732

(1
)%
1
 %
Total operating expenses—as reported
$
18,264

$
19,951

$
19,801

(8
)%
1
 %
Impact of FX translation(2)

(1,171
)
(1,382
)


 
Total operating expenses—ex-FX
$
18,264

$
18,780

$
18,419

(3
)%
2
 %
Total provisions for LLR & PBC—as reported
$
5,823

$
5,833

$
6,567

 %
(11
)%
Impact of FX translation(2)

(470
)
(558
)


 
Total provisions for LLR & PBC—ex-FX
$
5,823

$
5,363

$
6,009

9
 %
(11
)%
Net income—as reported
$
6,373

$
6,794

$
6,562

(6
)%
4
 %
Impact of FX translation(2)

(197
)
(416
)


 
Net income—ex-FX
$
6,373

$
6,597

$
6,146

(3
)%
7
 %
(1)
Includes both Citi-branded cards and Citi retail services.
(2)
Reflects the impact of FX translation into U.S. dollars at the 2015 average exchange rates for all periods presented.
NM Not meaningful


15



NORTH AMERICA GCB
North America GCB provides traditional retail banking, including commercial banking, and its Citi-branded cards and Citi retail services card products to retail customers and small to mid-size businesses, as applicable, in the U.S. North America GCB’s U.S. cards product portfolio includes its proprietary portfolio (including the Citi Double Cash, Thank You and Value cards) and co-branded cards (including, among others, American Airlines and Hilton Worldwide) within Citi-branded cards as well as its co-brand and private label relationships within Citi retail services.
As of December 31, 2015, North America GCB’s 780 retail bank branches are concentrated in the six key metropolitan areas of New York, Chicago, Miami, Washington, D.C., Los Angeles and San Francisco. Also as of December 31, 2015, North America GCB had approximately 10.9 million retail banking customer accounts, $51.8 billion of retail banking loans and $172.8 billion of deposits. In addition, North America GCB had approximately 113.4 million Citi-branded and Citi retail services credit card accounts, with $113.3 billion in outstanding card loan balances.
In millions of dollars, except as otherwise noted
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Net interest revenue
$
17,481

$
17,203

$
16,656

2
 %
3
 %
Non-interest revenue
1,967

2,466

3,142

(20
)
(22
)
Total revenues, net of interest expense
$
19,448

$
19,669

$
19,798

(1
)%
(1
)%
Total operating expenses
$
9,186

$
9,706

$
9,853

(5
)%
(1
)%
Net credit losses
$
3,753

$
4,206

$
4,636

(11
)%
(9
)%
Credit reserve build (release)
(339
)
(1,242
)
(1,036
)
73

(20
)
Provision for unfunded lending commitments
7

(8
)
6

NM

NM

Provisions for benefits and claims
38

40

59

(5
)
(32
)
Provisions for credit losses and for benefits and claims
$
3,459

$
2,996

$
3,665

15
 %
(18
)%
Income from continuing operations before taxes
$
6,803

$
6,967

$
6,280

(2
)%
11
 %
Income taxes
2,548

2,555

2,362


8

Income from continuing operations
$
4,255

$
4,412

$
3,918

(4
)%
13
 %
Noncontrolling interests

(1
)

100


Net income
$
4,255

$
4,413

$
3,918

(4
)%
13
 %
Balance Sheet data (in billions of dollars)
 
 

 



 
Average assets
$
208

$
211

$
204

(1
)%
3
 %
Return on average assets
2.05
%
2.09
%
1.92
%


 
Efficiency ratio
47

49

50



 
Average deposits
$
171.8

$
170.7

$
166.0

1

3

Net credit losses as a percentage of average loans
2.39
%
2.70
%
3.09
%


 
Revenue by business
 
 

 



 
Retail banking
$
5,208

$
4,917

$
5,389

6
 %
(9
)%
Citi-branded cards
7,809

8,290

8,220

(6
)
1

Citi retail services
6,431

6,462

6,189


4

Total
$
19,448

$
19,669

$
19,798

(1
)%
(1
)%
Income from continuing operations by business
 
 

 



 
Retail banking
$
659

$
355

$
416

86
 %
(15
)%
Citi-branded cards
2,075

2,391

1,945

(13
)
23

Citi retail services
1,521

1,666

1,557

(9
)
7

Total
$
4,255

$
4,412

$
3,918

(4
)%
13
 %


NM Not meaningful


16



2015 vs. 2014
Net income decreased by 4% due to lower loan loss reserve releases and lower revenues, partially offset by lower expenses and lower net credit losses.
Revenues decreased 1%, reflecting lower revenues in Citi-branded cards, partially offset by higher revenues in retail banking.
Retail banking revenues increased 6%. The increase was primarily driven by 7% growth in average loans, 9% growth in average checking deposits, improved deposit spreads and slightly higher mortgage origination revenues, partially offset by lower net gains on branch sales (approximately $40 million) and mortgage portfolio sales (approximately $80 million) as well as a lower mortgage repurchase reserve release (approximately $50 million) compared to 2014. This growth in retail banking revenues occurred despite the fact that, consistent with GCB’s strategy, during 2015, North America GCB closed or sold 69 branches (a 9% decline from the prior year), with announced plans to sell or close an additional 50 branches in the first quarter of 2016. With these actions, over 90% of North America GCB’s retail banking footprint will be concentrated in its six key metropolitan areas.
Cards revenues decreased 3% due to a 2% decline in average loans, partially offset by a 4% increase in purchase sales. In Citi-branded cards, revenues decreased 6%, primarily reflecting an increase in acquisition and rewards costs, particularly during the second half of 2015 as North America GCB deployed its investment spending (as discussed below) to grow its new account acquisitions in its core products. North America GCB expects the increased acquisition and rewards costs within Citi-branded cards to continue to negatively impact revenues in 2016. The decrease in Citi-branded cards revenues was also due to the continued impact of lower average loans (down 4%), driven primarily by continued high customer payment rates during the year, partially offset by a 6% increase in purchase sales.
Citi retail services revenues were largely unchanged as the continued impact of lower fuel prices, which negatively impacts purchase sales in the fuel portfolios, and higher contractual partner payments was offset by the impact of higher spreads and volumes (1% increase in average loans). The higher contractual partner payments resulted from the business sharing the benefits of higher yields and lower net credit losses with its retail partners. Purchase sales were unchanged as the continued impact of lower fuel prices was offset by volume growth. North America GCB expects the negative impact of lower fuel prices on Citi retail services revenues to continue in the near term.
Expenses decreased 5%, primarily due to ongoing cost reduction initiatives, including as a result of the branch rationalization strategy, and lower repositioning charges, partially offset by increased investment spending (including marketing, among other areas) in Citi-branded cards, which is expected to continue into 2016.
Provisions increased 15% largely due to lower net loan loss reserve releases (73%), partially offset by lower net credit losses (11%). Net credit losses declined in Citi-branded cards (down 14% to $1.9 billion) and in Citi retail services (down 8% to $1.7 billion). The lower loan loss reserve release
 
reflected overall credit stabilization in the cards portfolios during 2015. As a result of this stabilization, North America GCB expects to experience modest loan loss reserve builds during 2016.
In addition to the trends discussed above expected to impact North America GCB’s results of operations in 2016, North America GCB expects to make additional investments in its U.S. cards businesses during 2016, including investments in connection with Citi’s planned acquisition of the Costco portfolio, the closing of which is currently expected to occur mid-2016, as well as the expected impact of renewing certain important partnership programs in a competitive environment (see also “Risk Factors—Operational Risks” below). While North America GCB believes these investments are necessary for the growth of its U.S. cards businesses, they will reduce the pretax earnings of the businesses during 2016.

2014 vs. 2013
Net income increased by 13% due to lower net credit losses, higher loan loss reserve releases and lower expenses, partially offset by lower revenues.
Revenues decreased 1%, with lower revenues in retail banking, partially offset by higher revenues in Citi-branded cards and Citi retail services. Retail banking revenues of $4.9 billion decreased 9% due to lower mortgage origination revenues and spread compression in the deposit portfolios, partially offset by continued volume-related growth (average loans increased 9% and average deposits increased 3%) and gains from branch sales.
Cards revenues increased 2% as average loans increased 3% versus 2013. In Citi-branded cards, revenues increased 1% as a 4% increase in purchase sales and higher net interest spreads, driven by the continued reduction of promotional balances in the portfolio, mostly offset lower average loans. The decline in average loans was driven primarily by the reduction in promotional balances, and to a lesser extent, increased customer payment rates during the year.
Citi retail services revenues increased 4%, primarily due to a 12% increase in average loans driven by the Best Buy acquisition in September 2013, partially offset by continued declines in fee revenues primarily reflecting higher yields and improving credit and the resulting increase in contractual partner payments. Citi retail services revenues also benefited from lower funding costs, partially offset by a decline in net interest spreads due to a higher percentage of promotional balances within the portfolio.
Expenses decreased 1% as ongoing cost reduction initiatives were partially offset by higher repositioning charges, increased investment spending and an increase in Citi retail services expenses due to the impact of the Best Buy portfolio acquisition.
Provisions decreased 18% due to lower net credit losses (9%) and higher loan loss reserve releases (21%). Net credit losses declined in Citi-branded cards (down 14% to $2.2 billion) and in Citi retail services (down 2% to $1.9 billion). The loan loss reserve release increased due to the continued improvement in Citi-branded cards, partially offset by a lower loan loss reserve release in Citi retail services due to reserve builds for new loans originated in the Best Buy portfolio.


17



LATIN AMERICA GCB
Latin America GCB provides traditional retail banking, including commercial banking, and its Citi-branded card products to retail customers and small to mid-size businesses, as applicable, with the largest presence in Mexico. As of December 31, 2015, Latin America GCB includes branch networks in Brazil, Argentina, Colombia and Venezuela as well as Banco Nacional de Mexico, or Banamex, Mexico’s second-largest bank.
At December 31, 2015, Latin America GCB had 1,694 retail branches (1,492 through Banamex in Mexico), with approximately 31.9 million retail banking customer accounts, $24.0 billion in retail banking loans and $40.8 billion in deposits. In addition, the business had approximately 7.8 million Citi-branded card accounts with $7.5 billion in outstanding loan balances. As announced in February 2016, Citi intends to exit its consumer businesses in Argentina, Brazil and Colombia. For additional information, see “Citigroup Segments” and “Citicorp” above.
In millions of dollars, except as otherwise noted
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Net interest revenue
$
4,843

$
5,672

$
5,726

(15
)%
(1
)%
Non-interest revenue
2,480

2,788

2,850

(11
)
(2
)
Total revenues, net of interest expense
$
7,323

$
8,460

$
8,576

(13
)%
(1
)%
Total operating expenses
$
4,444

$
4,974

$
4,931

(11
)%
1
 %
Net credit losses
$
1,549

$
1,861

$
1,610

(17
)%
16
 %
Credit reserve build (release)
94

120

363

(22
)
(67
)
Provision (release) for unfunded lending commitments
1

(1
)

NM


Provision for benefits and claims
69

104

108

(34
)
(4
)
Provisions for credit losses and for benefits and claims (LLR & PBC)
$
1,713

$
2,084

$
2,081

(18
)%
 %
Income from continuing operations before taxes
$
1,166

$
1,402

$
1,564

(17
)%
(10
)%
Income taxes
238

244

313

(2
)
(22
)
Income from continuing operations
$
928

$
1,158

$
1,251

(20
)%
(7
)%
Noncontrolling interests
3

6

3

(50
)
100

Net income
$
925

$
1,152

$
1,248

(20
)%
(8
)%
Balance Sheet data (in billions of dollars)
 
 

 



 
Average assets
$
64

$
76

$
79

(16
)%
(4
)%
Return on average assets
1.45
%
1.52
%
1.66
%


 
Efficiency ratio
61

59

57



 
Average deposits
$
40.8

$
44.5

$
43.6

(8
)
2

Net credit losses as a percentage of average loans
4.67
%
4.86
%
4.42
%


 
Revenue by business
 
 
 


 
Retail banking
$
5,078

$
5,678

$
5,831

(11
)%
(3
)%
Citi-branded cards
2,245

2,782

2,745

(19
)
1

Total
$
7,323

$
8,460

$
8,576

(13
)%
(1
)%
Income from continuing operations by business
 
 

 



 
Retail banking
$
590

$
740

$
762

(20
)%
(3
)%
Citi-branded cards
338

418

489

(19
)
(15
)
Total
$
928

$
1,158

$
1,251

(20
)%
(7
)%
FX translation impact
 
 

 



 
Total revenues—as reported
$
7,323

$
8,460

$
8,576

(13
)%
(1
)%
Impact of FX translation(1)

(1,382
)
(1,784
)


 
Total revenues—ex-FX
$
7,323

$
7,078

$
6,792

3
 %
4
 %
Total operating expenses—as reported
$
4,444

$
4,974

$
4,931

(11
)%
1
 %
Impact of FX translation(1)

(737
)
(904
)


 
Total operating expenses—ex-FX
$
4,444

$
4,237

$
4,027

5
 %
5
 %
Provisions for LLR & PBC—as reported
$
1,713

$
2,084

$
2,081

(18
)%
 %
Impact of FX translation(1)

(373
)
(456
)


 
Provisions for LLR & PBC—ex-FX
$
1,713

$
1,711

$
1,625

 %
5
 %
Net income—as reported
$
925

$
1,152

$
1,248

(20
)%
(8
)%
Impact of FX translation(1)

(180
)
(338
)


 
Net income—ex-FX
$
925

$
972

$
910

(5
)%
7
 %

18



(1)
Reflects the impact of FX translation into U.S. dollars at the 2015 average exchange rates for all periods presented.
NM Not Meaningful

The discussion of the results of operations for Latin America GCB below excludes the impact of FX translation for all periods presented. Presentations of the results of operations, excluding the impact of FX translation, are non-GAAP financial measures. For a reconciliation of certain of these metrics to the reported results, see the table above.

2015 vs. 2014
Net income decreased 5% as higher expenses were partially offset by higher revenues.
Revenues increased 3%, primarily due to the approximately $180 million gain on sale in the third quarter of 2015 related to the Mexico merchant acquiring business. Excluding this gain, revenues increased 1% as the impact of modest volume growth was mostly offset by the absence of gains and revenues from businesses divested in 2014, including as a result of the sale of the Honduras consumer business in the second quarter and the partial sale of Citi’s indirect investment in Banco de Chile in the first quarter, as well as continued spread compression in cards. Revenues were also impacted by continued slow economic growth in the region during 2015.
Retail banking revenues increased 6%, excluding the gain on sale related to the merchant acquiring business and the business divestitures in 2014. This increase in retail banking revenues reflected volume growth, including an increase in average loans (4%) and average deposits (5%), partially offset by a decline in investment sales (15%). Cards revenues decreased 2%, primarily due to higher payment rates in Mexico resulting from the business’ focus on higher credit quality customers, consistent with GCB’s strategy, as well as muted volumes (low purchase sales growth and unchanged average loans). Cards revenues were also negatively impacted by ongoing shifts in consumer behavior, including due to the previously-disclosed regulatory reforms enacted in 2013 in Mexico. Latin America GCB expects the cards payment rate in Mexico to remain elevated in 2016.
Expenses increased 5%, primarily due to higher regulatory and compliance costs, higher technology spending and mandatory salary increases in certain countries, partially offset by lower repositioning charges, lower legal and related costs and ongoing efficiency savings.
Provisions were unchanged as higher net credit losses were partially offset by a lower net loan loss reserve build. Net credit losses increased 1%, largely reflecting portfolio growth as well as net credit losses incurred in the commercial banking portfolio in the fourth quarter of 2015 associated with a wind-down portfolio in Brazil, most of which was offset by the release of previously-established loan loss reserves. The higher net credit losses were partially offset by the absence of a $71 million charge-off in the fourth quarter of 2014 related to Citi’s homebuilder exposure in Mexico. The net loan loss reserve build declined 13%, primarily due to lower builds related to Mexico cards, partially offset by higher builds related to Brazil in the second half of 2015, as well as the absence of the releases related to the Mexico homebuilder exposure in 2014.

 

Argentina/Venezuela
For additional information on Citi’s exposures and risks in Argentina and Venezuela, see “Managing Global Risk—Country Risk” below.

2014 vs. 2013
Net income increased 7% as higher revenues were partially offset by higher expenses and credit costs.
Revenues increased 4%, primarily due to volume growth and spread and fee growth in Mexico, partially offset by continued spread compression in the region and slower overall economic growth in certain Latin America markets, including Mexico and Brazil during 2014. Retail banking revenues increased 3% as average loans increased 6%, investment sales increased 25% and average deposits increased 6%, partially offset by lower spreads in Brazil and Colombia. Cards revenues increased 8% as average loans increased 5% and purchase sales increased 1%, excluding the impact of Credicard’s results in the prior-year period (for additional information, see Note 2 to the Consolidated Financial Statements). The increase in cards revenues was partially offset by lower economic growth and slowing cards purchase sales in Mexico due to the regulatory reforms enacted during 2013, as referenced above.
Expenses increased 5%, primarily due to mandatory salary increases in certain countries, higher legal and related costs, increased repositioning charges and higher technology spending, partially offset by productivity and repositioning savings.
Provisions increased 5%, primarily due to higher net credit losses, which were partially offset by a lower loan loss reserve build. Net credit losses increased 22%, driven by portfolio growth and continued seasoning in the Mexico cards portfolio. Net credit losses were also impacted by both the slower economic growth and regulatory reforms in Mexico as well as the $71 million charge-off related to Citi’s homebuilder exposure in Mexico.
  









19



ASIA GCB
Asia GCB provides traditional retail banking, including commercial banking, and its Citi-branded card products to retail customers and small to mid-size businesses, as applicable. As of December 31, 2015, Citi’s most significant revenues in the region were from Korea, Singapore, Hong Kong, Australia, India, Taiwan, Malaysia, Thailand, Indonesia and the Philippines. In addition, for reporting purposes, Asia GCB includes the results of operations of EMEA GCB, which provides traditional retail banking, including commercial banking, and Citi-branded card products to retail customers and small to mid-size businesses, primarily in Poland, Russia and the United Arab Emirates.
At December 31, 2015, on a combined basis, the businesses had 520 retail branches, approximately 17.5 million retail banking customer accounts, $71.0 billion in retail banking loans and $87.8 billion in deposits. In addition, the business had approximately 16.9 million Citi-branded card accounts with $17.7 billion in outstanding loan balances.
In millions of dollars, except as otherwise noted(1)
2015
2014
2013
% Change 
 2015 vs. 2014
% Change 
 2014 vs. 2013
Net interest revenue
$
4,557

$
5,049

$
5,163

(10
)%
(2
)%
Non-interest revenue
2,534

2,839

2,768

(11
)
3

Total revenues, net of interest expense
$
7,091

$
7,888

$
7,931

(10
)%
(1
)%
Total operating expenses
$
4,634

$
5,271

$
5,017

(12
)%
5
 %
Net credit losses
$
727

$
793

$
771

(8
)%
3
 %
Credit reserve build (release)
(73
)
(26
)
19

NM

NM

Provision (release) for unfunded lending commitments
(3
)
(14
)
31

79

NM

Provisions for credit losses
$
651

$
753

$
821

(14
)%
(8
)%
Income from continuing operations before taxes
$
1,806

$
1,864

$
2,093

(3
)%
(11
)%
Income taxes
607

615

686

(1
)
(10
)
Income from continuing operations
$
1,199

$
1,249

$
1,407

(4
)%
(11
)%
Noncontrolling interests
6

20

11

(70
)
82

Net income
$
1,193

$
1,229

$
1,396

(3
)%
(12
)%
Balance Sheet data (in billions of dollars)
 
 

 



 
Average assets
$
120

$
122

$
119

(2
)%
3
 %
Return on average assets
0.99
%
1.01
%
1.17
%


 
Efficiency ratio
65

67

63



 
Average deposits
$
87.9

$
89.7

$
89.4

(2
)

Net credit losses as a percentage of average loans
0.80
%
0.82
%
0.84
%


 
Revenue by business
 
 
 


 
Retail banking
$
4,491

$
4,866

$
4,771

(8
)%
2
 %
Citi-branded cards
2,600

3,022

3,160

(14
)
(4
)
Total
$
7,091

$
7,888

$
7,931

(10
)%
(1
)%
Income from continuing operations by business
 
 
 


 
Retail banking
$
740

$
692

$
719

7
 %
(4
)%
Citi-branded cards
459

557

688

(18
)
(19
)
Total
$
1,199

$
1,249

$
1,407

(4
)%
(11
)%

20



FX translation impact
 
 
 


 
Total revenues—as reported
$
7,091

$
7,888

$
7,931

(10
)%
(1
)%
Impact of FX translation(2)

(587
)
(789
)


 
Total revenues—ex-FX
$
7,091

$
7,301

$
7,142

(3
)%
2
 %
Total operating expenses—as reported
$
4,634

$
5,271

$
5,017

(12
)%
5
 %
Impact of FX translation(2)

(434
)
(478
)


 
Total operating expenses—ex-FX
$
4,634

$
4,837

$
4,539

(4
)%
7
 %
Provisions for loan losses—as reported
$
651

$
753

$
821

(14
)%
(8
)%
Impact of FX translation(2)

(97
)
(102
)


 
Provisions for loan losses—ex-FX
$
651

$
656

$
719

(1
)%
(9
)%
Net income—as reported
$
1,193

$
1,229

$
1,396

(3
)%
(12
)%
Impact of FX translation(2)

(17
)
(78
)


 
Net income—ex-FX
$
1,193

$
1,212

$
1,318

(2
)%
(8
)%

(1)
For reporting purposes, Asia GCB includes the results of operations of EMEA GCB for all periods presented.
(2)
Reflects the impact of FX translation into U.S. dollars at the 2015 average exchange rates for all periods presented.
NM
Not meaningful

The discussion of the results of operations for Asia GCB below excludes the impact of FX translation for all periods presented. Presentations of the results of operations, excluding the impact of FX translation, are non-GAAP financial measures. For a reconciliation of certain of these metrics to the reported results, see the table above.

2015 vs. 2014
Net income decreased 2%, primarily due to lower revenues, partially offset by lower expenses.
Revenues decreased 3%, primarily due to an industry-wide slowdown in investment sales, particularly in the second half of 2015, as well as spread compression and higher payment rates and the ongoing impact of regulatory changes in cards, partially offset by volume growth.
Retail banking revenues decreased 2%, mainly due to a decline in investment sales revenue, particularly in Taiwan, Singapore, India, Korea and Indonesia, reflecting weaker customer confidence due to slowing economic growth and volatility in the capital markets, as well as spread compression, particularly in Poland. This decline in revenues was partially offset by higher volumes, driven by lending (2% increase in average loans), deposit products (5% increase in average deposits) and higher insurance fee revenues. Citi expects investment sales revenues could continue to be challenged in 2016, depending upon overall consumer sentiment, economic growth and the capital markets environment in the region.
Cards revenues decreased 5%, primarily due to spread compression, including continued high payment rates, and the ongoing impact of regulatory changes, particularly in Singapore, Taiwan, Australia, Malaysia and Poland, partially offset by modest volume growth (a 3% increase in average loans and a 5% increase in purchase sales). Cards revenues were also impacted by the weaker customer confidence, primarily in the second half of 2015. Spread compression and regulatory changes will likely continue to have a negative impact on cards revenues in the near term.
Expenses decreased 4%, primarily due to the absence of repositioning charges in Korea in 2014 and efficiency savings, partially offset by higher regulatory and compliance costs,
 
investment spending, volume-related growth and compensation expense.
Provisions decreased 1%, primarily due to higher loan loss reserve releases, largely offset by an increase in net credit losses related to the consumer business in Russia due to a deterioration in the economic environment. Overall credit quality remained stable across the region during 2015.



21



2014 vs. 2013
Net income decreased 8%, primarily due to higher expenses, partially offset by lower credit costs and higher revenues.
Revenues increased 2%, reflecting higher retail banking revenues, partially offset by lower cards revenues. Retail banking revenues increased 4%, due to higher insurance fee revenues and volume growth (average retail loans increased 8% and average retail deposits increased 2%), partially offset by the ongoing impact of regulatory changes and continued spread compression.
Cards revenues decreased 1%, due to the impact of regulatory changes, particularly in Korea, Indonesia and Singapore, spread compression and customer deleveraging, largely offset by a 2% increase in average loans and a 3% increase in purchase sales driven by growth in China, India, Singapore and Hong Kong.
Expenses increased 7%, primarily due to higher repositioning charges in Korea, investment spending and volume-related growth, partially offset by higher efficiency savings.
Provisions decreased 9%, primarily due to higher overall loan loss reserve releases, partially offset by a loan loss reserve build related to the consumer business in Russia.











22


INSTITUTIONAL CLIENTS GROUP

Institutional Clients Group (ICG) provides corporate, institutional, public sector and high-net-worth clients around the world with a full range of wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance and securities services. ICG transacts with clients in both cash instruments and derivatives, including fixed income, foreign currency, equity and commodity products.
ICG revenue is generated primarily from fees and spreads associated with these activities. ICG earns fee income for assisting clients in clearing transactions, providing brokerage and investment banking services and other such activities. Revenue generated from these activities is recorded in Commissions and fees and Investment banking. In addition, as a market maker, ICG facilitates transactions, including holding product inventory to meet client demand, and earns the differential between the price at which it buys and sells the products. These price differentials and the unrealized gains and losses on the inventory are recorded in Principal transactions. Other primarily includes mark-to-market gains and losses on credit derivatives, gains and losses on available-for-sale (AFS) securities and other non-recurring gains and losses. Interest income earned on inventory and loans held less interest paid to customers on deposits is recorded as Net interest revenue. Revenue is also generated from transaction processing and assets under custody and administration.
ICG’s international presence is supported by trading floors in approximately 80 countries and a proprietary network in over 95 countries and jurisdictions. At December 31, 2015, ICG had approximately $1.2 trillion of assets and $587 billion of deposits, while two of its businesses, securities services and issuer services, managed approximately $15.1 trillion of assets under custody compared to $16.1 trillion at the end of 2014. The decline in assets under custody from 2014 was primarily due to the impact of FX translation and a decline in market volumes.
In millions of dollars, except as otherwise noted
2015
2014
2013
% Change 
 2015 v