DISCONTINUED OPERATIONS AND SIGNIFICANT DISPOSALS

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND SIGNIFICANT DISPOSALS

DISCONTINUED OPERATIONS AND SIGNIFICANT DISPOSALS

Discontinued Operations

The following sales are reported as Discontinued operations within Corporate/Other.

Sale of Egg Banking plc Credit Card Business

Citi sold the Egg Banking plc credit card business in 2011. Residual costs from the disposal resulted in losses from Discontinued operations, net of taxes, of $18 million and $2 million for the three months ended March 31, 2017 and 2016, respectively.

Combined Results for Discontinued Operations

The following summarizes financial information for all Discontinued operations for which Citi continues to have minimal residual costs associated with the sales:

	Three months ended   March 31,
In millions of dollars	2017			2016
Total revenues, net of interest expense	$	—		$	—
Income (loss) from discontinued operations	$	(28	)	$	(3	)
Provision (benefit) for income taxes	(10		)	(1		)
Income (loss) from discontinued operations, net of taxes	$	(18	)	$	(2	)

Cash flows for the Discontinued operations were not material for the periods presented.

Significant Disposals

The following sales completed during 2017 and 2016 were identified as significant disposals. The major classes of assets and liabilities derecognized from the Consolidated Balance Sheet at closing and the income related to each business until the disposal date are presented below.

Novation of the 80% Primerica Coinsurance Agreement

Effective January 1, 2016, Citi completed a novation (an arrangement that extinguishes Citi’s rights and obligations under a contract) of the Primerica 80% coinsurance agreement, which was part of Corporate/Other, to a third-party re-insurer. The novation resulted in revenues of $404 million recorded in Other revenue ($263 million after-tax) during the first quarter of 2016. Furthermore, the novation resulted in derecognition of $1.5 billion of available-for-sale securities and cash, $0.95 billion of deferred acquisition costs and $2.7 billion of insurance liabilities.

Exit of U.S. Mortgage Service Operations

As previously disclosed, Citigroup signed agreements during the first quarter of 2017 to effectively exit its U.S. mortgage servicing operations by the end of 2018 to intensify focus on originations. The exit of the mortgage servicing operations included the sale of mortgage servicing rights and execution of a subservicing agreement for the remaining Citi-owned loans and certain other mortgage servicing rights. As part of this transaction, Citi will also transfer certain employees.

This transaction, which was part of Corporate/Other, resulted in a pretax loss of $331 million ($207 million after tax) recorded in Other revenue during the first quarter of 2017. The loss on sale does not include certain other costs and charges related to the disposed operation recorded primarily in Operating Expenses in the first quarter of 2017, resulting in a total pretax loss of $382 million. As part of the completed sale, Citi derecognized a total of $1,162 million of servicing related assets, including $1,046 million of mortgage servicing rights, related to approximately 750,000 Fannie Mae and Freddie Mac held loans with outstanding balances of approximately $93 billion. Excluding the loss on sale and the additional charges recorded during the current period, income before taxes for the disposed operation was immaterial for the three months ended March 31, 2017 and 2016.

Sale of CitiFinancial Canada Consumer Finance Business

On March 31, 2017, Citi sold CitiFinancial Canada (CitiFinancial), which was part of Corporate/Other, including 220 retail branches and approximately 1,400 employees. As part of the sale, Citi derecognized total assets of approximately $1.9 billion, including $1.7 billion consumer loans (net of allowance), and total liabilities of approximately $1.5 billion related to intercompany borrowings, which were settled at closing of the transaction. Separately, during the first quarter of 2017, CitiFinancial settled $0.4 billion of debt issued through loan securitizations. The transaction generated a pretax gain on sale of $350 million recorded in Other revenue ($178 million after-tax).

Income before taxes, excluding the pretax gain on sale, was as follows:

	Three months ended   March 31,
In millions of dollars	2017		2016
Income before taxes	$	30	$	21