COMMISSIONS AND FEES; ADMINISTRATION AND OTHER FIDUCIARY FEES

The primary components of Commissions and fees revenue are investment banking fees, brokerage commissions, credit- and bank-card income and deposit-related fees.

Investment banking fees are substantially composed of underwriting and advisory revenues. Such fees are recognized at the point in time when Citigroup’s performance under the terms of a contractual arrangement is completed, which is typically at the closing of a transaction. Reimbursed expenses related to these transactions are recorded as revenue and are included within investment banking fees. In certain instances for advisory contracts, Citi will receive amounts in advance of the deal’s closing. In these instances, the amounts received will be recognized as a liability and not recognized in revenue until the transaction closes. The contract liability amount for the periods presented was negligible. Out-of-pocket expenses associated with underwriting activity are deferred and recognized at the time the related revenue is recognized, while out-of-pocket expenses associated with advisory arrangements are expensed as incurred. In general, expenses incurred related to investment banking transactions, whether consummated or not, are recorded in Other operating expenses. The Company has determined that it acts as principal in the majority of these transactions and therefore presents expenses gross within Other operating expenses.

Brokerage commissions primarily include commissions and fees from the following: executing transactions for clients on exchanges and over-the-counter markets; sales of mutual funds and other annuity products; and assisting clients in clearing transactions, providing brokerage services and other such activities. Brokerage commissions are recognized in Commissions and fees at the point in time the associated service is fulfilled, generally on the trade execution date. Gains or losses, if any, on these transactions are included in Principal transactions (see Note 6 to the Consolidated Financial Statements). Sales of certain investment products include a portion of variable consideration associated with the underlying product. In these instances, a portion of the revenue associated with the sale of the product is not recognized until the variable consideration becomes fixed. The Company recognized $521 million, $416 million and $371 million of revenue related to such variable consideration for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts primarily relate to performance obligations satisfied in prior periods.

Credit- and bank-card income is primarily composed of

interchange fees, which are earned by card issuers based on

purchase sales, and certain card fees, including annual fees.

Costs related to customer reward programs and certain

payments to partners (primarily based on program sales,

profitability and customer acquisitions) are recorded as a

reduction of credit- and bank-card income. Interchange

revenues are recognized as earned on a daily basis when Citi's

performance obligation to transmit funds to the payment

networks has been satisfied. Annual card fees, net of

origination costs, are deferred and amortized on a straight-line

basis over a 12-month period. Costs related to card reward

programs are recognized when the rewards are earned by the

cardholders. Payments to partners are recognized when

incurred.

Deposit-related fees consist of service charges on deposit

accounts and fees earned from performing cash management

activities and other deposit account services. Such fees are

recognized in the period in which the related service is

provided.

Transactional service fees primarily consist of fees

charged for processing services such as cash management,

global payments, clearing, international funds transfer and

other trade services. Such fees are recognized as/when the

associated service is satisfied, which normally occurs at the

point in time the service is requested by the customer and

provided by Citi.

Insurance distribution revenue consists of commissions

earned from third-party insurance companies for marketing

and selling insurance policies on behalf of such entities. Such

commissions are recognized in Commissions and fees at the

point in time the associated service is fulfilled, generally when

the insurance policy is sold to the policyholder. Sales of

certain insurance products include a portion of variable

consideration associated with the underlying product. In these

instances, a portion of the revenue associated with the sale of

the policy is not recognized until the variable consideration

becomes determinable. The Company recognized $386 million, $440 million and $479 million of revenue related to such variable consideration for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts primarily relate to performance obligations in prior periods.

Insurance premiums consist of premium income from

insurance policies that Citi has underwritten and sold to

policyholders.

The following table presents Commissions and fees revenue:



	2018												2017												2016
In millions of dollars	ICG			GCB			Corp/Other			Total			ICG			GCB			Corp/Other			Total			ICG			GCB			Corp/Other			Total
Investment banking	$	3,568		$	—		$	—		$	3,568		$	3,817		$	—		$	—		$	3,817		$	3,000		$	—		$	—		$	3,000
Brokerage commissions	1,977			815			—			2,792			1,889			826			3			2,718			1,748			636			11			2,395
Credit- and bank-card income
Interchange fees	1,072			8,117			11			9,200			950			7,526			99			8,575			837			6,189			164			7,190
Card-related loan fees	63			627			12			702			53			693			48			794			27			784			65			876
Card rewards and partner payments	(503		)	(8,254		)	(12		)	(8,769		)	(425		)	(7,243		)	(57		)	(7,725		)	(361		)	(6,084		)	(111		)	(6,556		)
Deposit-related fees⁽¹⁾	949			654			1			1,604			947			726			14			1,687			818			721			19			1,558
Transactional service fees	718			98			4			820			738			91			49			878			700			84			136			920
Corporate finance⁽²⁾	729			5			—			734			761			5			—			766			741			4			—			745
Insurance distribution revenue⁽³⁾	14			565			11			590			12			562			68			642			10			584			90			684
Insurance premiums⁽³⁾	—			119			—			119			—			122			—			122			—			136			144			280
Loan servicing	156			122			37			315			146			101			95			342			147			127			77			351
Other	25			143			14			182			(38		)	99			30			91			31			90			114			235
Total commissions and fees⁽⁴⁾	$	8,768		$	3,011		$	78		$	11,857		$	8,850		$	3,508		$	349		$	12,707		$	7,698		$	3,271		$	709		$	11,678


(1)	Includes overdraft fees of $128 million, $135 million and $133 million for the years ended December 31, 2018, 2017 and 2016, respectively. Overdraft fees are accounted for under ASC 310.


(2)	Consists primarily of fees earned from structuring and underwriting loan syndications or related financing activity. This activity is accounted for under ASC 310.


(3)	Previously reported as insurance premiums in the Consolidated Statement of Income.

(4)

Commissions and fees includes $(6,766) million, $(5,568) million and $(4,169) million not accounted for under ASC 606, Revenue from Contracts with Customers, for the years ended December 31, 2018, 2017 and 2016, respectively. Amounts reported in Commissions and fees accounted for under other guidance primarily include card-related loan fees, card reward programs and certain partner payments, corporate finance fees, insurance premiums and loan servicing fees.

Administration and Other Fiduciary Fees

Administration and other fiduciary fees are primarily composed of custody fees and fiduciary fees.

The custody product is composed of numerous services related to the administration, safekeeping and reporting for both U.S. and non-U.S. denominated securities. The services offered to clients include trade settlement, safekeeping, income collection, corporate action notification, record-keeping and reporting, tax reporting and cash management. These services are provided for a wide range of securities, including but not limited to equities, municipal and corporate bonds, mortgage- and asset-backed securities, money market instruments, U.S. Treasuries and agencies, derivative instruments, mutual funds, alternative investments and precious metals. Custody fees are recognized as or when the associated promised service is satisfied, which normally occurs at the point in time the service is requested by the customer and provided by Citi.

Fiduciary fees consist of trust services and investment management services. As an escrow agent, Citi receives, safe-keeps, services and manages clients’ escrowed assets such as cash, securities, property (including intellectual property), contracts or other collateral. Citi performs its escrow agent duties by safekeeping the funds during the specified time period agreed upon by all parties and therefore earns its revenue evenly during the contract duration.

Investment management services consist of managing assets on behalf of Citi’s retail and institutional clients. Revenue from these services primarily consists of asset-based fees for advisory accounts, which are based on the market value of the client’s assets and recognized monthly, when the market value is fixed. In some instances, the Company contracts with third-party advisors and with third-party custodians. The Company has determined that it acts as principal in the majority of these transactions and therefore presents the amounts paid to third parties gross within Other operating expenses.

The following table presents Administration and other fiduciary fees:



	2018								2017								2016
In millions of dollars	ICG		GCB		Corp/Other		Total		ICG		GCB		Corp/Other		Total		ICG		GCB		Corp/Other		Total
Custody fees	$	1,494	$	136	$	65	$	1,695	$	1,505	$	167	$	56	$	1,728	$	1,353	$	163	$	48	$	1,564
Fiduciary fees	645		597		43		1,285		593		575		91		1,259		554		539		50		1,143
Guarantee fees	536		57		7		600		535		54		8		597		523		54		10		587
Total administration and other fiduciary fees⁽¹⁾	$	2,675	$	790	$	115	$	3,580	$	2,633	$	796	$	155	$	3,584	$	2,430	$	756	$	108	$	3,294


(1)	Administration and other fiduciary fees includes $600 million, $597 million and $587 million for the years ended December 31, 2018, 2017 and 2016, respectively, that are not accounted for under ASC 606, Revenue from Contracts with Customers. These amounts include guarantee fees.