ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2012

ALLOWANCE FOR CREDIT LOSSES

Allowance for credit losses

	Three Months Ended September 30,						Nine Months Ended September 30,
In millions of dollars	2012			2011			2012			2011
Allowance for loan losses at beginning of period	$	27,611		$	34,362		$	30,115		$	40,655
Gross credit losses(1)(2)		(4,638	)		(5,217	)		(13,726	)		(18,254	)
Gross recoveries		659			703			2,216			2,324
Net credit losses (NCLs)	$	(3,979	)	$	(4,514	)	$	(11,510	)	$	(15,930	)
NCLs replenishments	$	3,979		$	4,514		$	11,510		$	15,930
Net reserve builds (releases)(1)		(868	)		(1,591	)		(1,678	)		(7,023	)
Net specific reserve builds (releases)(2)		(600	)		126			(1,908	)		222
Total provision for credit losses	$	2,511		$	3,049		$	7,924		$	9,129
Other, net(3)		(227	)		(845	)		(613	)		(1,802	)
Allowance for loan losses at end of period	$	25,916		$	32,052		$	25,916		$	32,052
Allowance for credit losses on unfunded lending commitments at beginning of period(4)	$	1,104		$	1,097		$	1,136		$	1,066
Provision for unfunded lending commitments		(41	)		43			(72	)		55
Other, net		—			(1	)		(1	)		18
Allowance for credit losses on unfunded lending commitments at end of period(2)	$	1,063		$	1,139		$	1,063		$	1,139
Total allowance for loans, leases, and unfunded lending commitments	$	26,979		$	33,191		$	26,979		$	33,191

(1)

The third quarter of 2012 includes approximately $635 million of incremental charge-offs related to new OCC guidance with respect to the treatment of mortgage loans where the borrower has gone through Chapter 7 bankruptcy. There was a corresponding approximately $600 million release in the third quarter of 2012 allowance for loan losses previously established related to these charge-offs. See Note 1 to the Consolidated Financial Statements.

(2)

The first quarter of 2012 included approximately $370 million of incremental charge-offs related to previously deferred principal balances on modified mortgages. These charge-offs were related to anticipated forgiveness of principal, largely in connection with the national mortgage settlement. There was a corresponding approximate $350 million reserve release in the first quarter of 2012 specific to these charge-offs.

(3)

The nine months ended September 30, 2012 primarily included reductions of approximately $620 million related to the sale or transfer to held-for-sale of various U.S. loan portfolios. The nine months ended September 30, 2011 included a reduction of approximately $1,230 million related to the sale or transfer to held-for-sale of various U.S. loan portfolios and a reduction of $240 million related to the sale of the Egg Banking PLC credit card business. See Note 2 to the Consolidated Financial Statements

(4)

Represents additional credit loss reserves for unfunded lending commitments and letters of credit recorded in Other liabilities on the Consolidated Balance Sheet.

Schedule of allowance for credit losses and investment in loans by portfolio segment

	Three Months Ended September 30, 2012									Nine Months Ended September 30, 2012
In millions of dollars	Corporate			Consumer			Total			Corporate			Consumer			Total
Allowance for loan losses at beginning of period	$	2,972		$	24,639		$	27,611		$	2,879		$	27,236		$	30,115
Charge-offs		(196	)		(4,442	)		(4,638	)		(508	)		(13,218	)		(13,726	)
Recoveries		79			580			659			320			1,896			2,216
Replenishment of net charge-offs		117			3,862			3,979			188			11,322			11,510
Net reserve releases		1			(869	)		(868	)		78			(1,756	)		(1,678	)
Net specific reserve builds (releases)		(175	)		(425	)		(600	)		(170	)		(1,738	)		(1,908	)
Other		19			(246	)		(227	)		30			(643	)		(613	)
Ending balance	$	2,817		$	23,099		$	25,916		$	2,817		$	23,099		$	25,916

	September 30, 2012						December 31, 2011
In millions of dollars	Corporate		Consumer		Total		Corporate		Consumer		Total
Allowance for loan losses
Determined in accordance with ASC 450-20	$	2,502	$	16,048	$	18,550	$	2,408	$	18,334	$	20,742
Determined in accordance with ASC 310-10-35		254		7,021		7,275		420		8,885		9,305
Determined in accordance with ASC 310-30		61		30		91		51		17		68
Total allowance for loan losses	$	2,817	$	23,099	$	25,916	$	2,879	$	27,236	$	30,115
Loans, net of unearned income
Loans collectively evaluated for impairment in accordance with ASC 450-20	$	243,510	$	375,226	$	618,736	$	215,778	$	390,831	$	606,609
Loans evaluated for impairment in accordance with ASC 310-10-35		2,946		30,849		33,795		3,994		30,863		34,857
Loans acquired with deteriorated credit quality in accordance with ASC 310-30		112		421		533		191		320		511
Loans held at fair value		4,103		1,256		5,359		3,939		1,326		5,265
Total loans, net of unearned income	$	250,671	$	407,752	$	658,423	$	223,902	$	423,340	$	647,242