To read CEO Michael L. Corbat s Letter to Shareholders, please visit citi.com/annualreport

Transcription

1 To read CEO Michael L. Corbat s Letter to Shareholders, please visit citi.com/annualreport

2 This page intentionally left blank.

3 Delaware (State or other jurisdiction of incorporation or organization) 399 Park Avenue, New York, NY (Address of principal executive offices) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C 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, 2013 Commission file number Citigroup Inc. (Exact name of registrant as specified in its charter) (212) (Registrant s telephone number, including area code) (I.R.S. Employer Identification No.) (Zip code) Securities registered pursuant to Section 12(b) of the Act: See Exhibit 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 No 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 No 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 No 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 ( 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 No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( 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. 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 Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of Citigroup Inc. common stock held by non-affiliates of Citigroup Inc. on June 30, 2013 was approximately $145.7 billion. Number of shares of Citigroup Inc. common stock outstanding on January 31, 2014: 3,036,458,909 Documents Incorporated by Reference: Portions of the registrant s proxy statement for the annual meeting of stockholders scheduled to be held on April 22, 2014, 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

4 FORM 10-K CROSS-REFERENCE INDEX Item Number Page Part III Part I 1. Business , 39, , , 172, A. Risk Factors B. Unresolved Staff Comments... Not Applicable 2. Properties Legal Proceedings Mine Safety Disclosures... Not Applicable Part II 5. Market for Registrant s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities , 179, 312, , Selected Financial Data Management s Discussion and Analysis of Financial Condition and Results of Operations , A. Quantitative and Qualitative Disclosures About Market Risk , , , Directors, Executive Officers and Corporate Governance , 322* 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... * 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 22, 2014, to be filed with the SEC (the Proxy Statement), incorporated herein by reference. ** See Executive Compensation The Personnel and Compensation Committee Report, Compensation Discussion and Analysis and 2013 Summary Compensation Table in the Proxy Statement, incorporated herein by reference. *** See About the Annual Meeting, Stock Ownership and Proposal 4, Approval of Amendment to the Citigroup 2009 Stock Incentive Plan 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. 8. Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure... Not Applicable 9A. Controls and Procedures B. Other Information... Not Applicable 2

5 CITIGROUP'S 2013 ANNUAL REPORT ON FORM 10-K OVERVIEW 4 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6 Executive Summary 6 Five-Year Summary of Selected Financial Data 10 SEGMENT AND BUSINESS INCOME (LOSS) AND REVENUES 12 CITICORP 15 Global Consumer Banking 16 North America Regional Consumer Banking 18 EMEA Regional Consumer Banking 20 Latin America Regional Consumer Banking 22 Asia Regional Consumer Banking 24 Institutional Clients Group 26 Securities and Banking 27 Transaction Services 30 Corporate/Other 32 CITI HOLDINGS 33 BALANCE SHEET REVIEW 36 OFF-BALANCE-SHEET ARRANGEMENTS 40 CONTRACTUAL OBLIGATIONS 41 CAPITAL RESOURCES 42 Current Regulatory Capital Guidelines 42 Basel III 47 Regulatory Capital Standards Developments 51 Tangible Common Equity and Tangible Book Value Per Share 55 RISK FACTORS 56 MANAGING GLOBAL RISK 69 Risk Management Overview 69 Risk Management Organization Risk Aggregation and Stress Testing Risk Capital 72 Managing Global Risk Index Credit, Market (Including Funding and Liquidity), Operational, Country and Cross-Border Risk Sections 73 FAIR VALUE ADJUSTMENTS FOR DERIVATIVES AND FAIR VALUE OPTION LIABILITIES 132 CREDIT DERIVATIVES 133 SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES 136 DISCLOSURE CONTROLS AND PROCEDURES 141 MANAGEMENT S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 142 FORWARD-LOOKING STATEMENTS 143 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INTERNAL CONTROL OVER FINANCIAL REPORTING 145 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSOLIDATED FINANCIAL STATEMENTS 146 FINANCIAL STATEMENTS AND NOTES TABLE OF CONTENTS 147 CONSOLIDATED FINANCIAL STATEMENTS 148 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 155 FINANCIAL DATA SUPPLEMENT 313 SUPERVISION, REGULATION AND OTHER 314 Supervision and Regulation 314 Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act 315 Customers 316 Competition 316 Properties 316 Legal Proceedings 316 UNREGISTERED SALES OF EQUITY, PURCHASES OF EQUITY SECURITIES, DIVIDENDS 317 CORPORATE INFORMATION 319 Citigroup Executive Officers 319 CITIGROUP BOARD OF DIRECTORS 322 3

6 OVERVIEW Citigroup s history dates back to the founding of Citibank in Citigroup s original corporate predecessor was incorporated in 1988 under the laws of the State of Delaware. Following a series of transactions over a number of years, Citigroup Inc. was formed in 1998 upon the merger of Citicorp and Travelers Group Inc. 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, transaction services and wealth management. Citi has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. At December 31, 2013, Citi had approximately 251,000 full-time employees, compared to approximately 259,000 full-time employees at December 31, 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 Citigroup s recent annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy statements, as well as other filings with the 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 Certain reclassifications 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 Citi s Forms 8-K furnished to the SEC on May 17, 2013 and August 30, Please see Risk Factors and Forward-Looking Statements below for a discussion of the most significant risks and uncertainties that could impact Citigroup s businesses, financial condition and results of operations. 4

7 As described above, Citigroup is managed pursuant to the following segments: CITIGROUP SEGMENTS Citicorp Citi Holdings Global Consumer Banking (GCB) Regional Consumer Banking (RCB) in: North America EMEA Latin America Asia Consisting of: Retail banking, local commercial banking and branch-based financial advisors - Residential real estate - Asset management in Latin America Citi-branded cards in North America, EMEA, Latin America and Asia Citi retail services in North America Institutional Clients Group* (ICG) Securities and Banking - Investment banking - Corporate lending - Fixed income and equity markets (including prime brokerage) - Fixed income and equity research - Private Bank Transaction Services - Treasury and trade solutions - Securities and fund services Corporate/ Other - Treasury - Operations and technology - Global staff functions and other corporate expenses - Discontinued operations - North America Consumer loans, including Consumer loans originated by Citi s legacy CitiFinancial North America business - Certain international consumer lending (including Western Europe retail banking and cards and Japan Consumer Finance) - Consumer portfolios of securities, loans and other assets - Certain retail alternative investments * Effective in the first quarter of 2014, certain business activities within Securities and Banking and Transaction Services will be realigned and aggregated as Banking and Markets and Securities Services components within the ICG segment. The change is due to the realignment of the management structure within the ICG segment and will have no impact on any total segment-level information. Citi intends to release a revised Quarterly Financial Data Supplement reflecting this realignment prior to the release of first quarter of 2014 earnings information. The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results above. CITIGROUP REGIONS (1) North America Europe, Middle East and Africa (EMEA) Latin America Asia (1) North America includes the U.S., Canada and Puerto Rico, Latin America includes Mexico, and Asia includes Japan. 5

8 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXECUTIVE SUMMARY Overview 2013 Steady Progress on Execution Priorities and Strategy Despite Continued Challenging Operating Environment 2013 represented a continued challenging operating environment for Citigroup in several respects, including: changing expectations regarding the Federal Reserve Board s tapering of quantitative easing and the impact of this uncertainty on the markets, trading environment and customer activity; the increasing costs of legal settlements across the financial services industry as Citi continued to work through its legacy legal issues; and a continued low interest rate environment. These issues significantly impacted Citi s results of operations, particularly during the second half of Despite these challenges, however, Citi made progress on its execution priorities as identified in early 2013, including: Efficient resource allocation, including disciplined expense management During 2013, Citi completed the significant repositioning actions announced in the fourth quarter of 2012, which resulted in the exit of markets that do not fit Citi s strategy and contributed to the reduction in its operating expenses year-over-year (see discussion below). Continued focus on the wind down of Citi Holdings and getting Citi Holdings closer to break even Citi Holdings assets declined by $39 billion, or 25%, during 2013, and the net loss for this segment improved by approximately 49% (see discussion below). Citi also was able to resolve certain of its legacy legal issues during 2013, including entering into agreements with Fannie Mae and Freddie Mac relating to residential mortgage representation and warranty repurchase matters. Utilization of deferred tax assets (DTAs) Citi utilized approximately $2.5 billion of its DTAs during 2013, including $700 million in the fourth quarter. While making good progress on these initiatives in 2013, Citi expects the operating environment in 2014 to remain challenging. Short-term interest rates likely will remain low for some time, and thus spread compression could continue to impact most of Citi s major geographies during the year. (As used throughout this Form 10-K, spread compression refers to the reduction in net interest revenue as a percentage of loans or deposits, as applicable, driven by either lower yields on interest-earning assets or higher costs to fund such assets, or a combination thereof). Given the current litigation and regulatory environment, Citi expects its legal and related expenses will likely remain elevated in There continues to be uncertainty regarding tapering by the Federal Reserve Board and its impact on the markets, including the emerging markets, and global trading environment. In addition, despite an improved economic environment in 2013, there continues to be questions about the sustainability and pace of ongoing improvement in various markets. Finally, Citi continues to face significant regulatory changes, uncertainties and costs in the U.S. and non-u.s. jurisdictions in which it operates. For a more detailed discussion of these and other risks that could impact Citi s businesses, results of operations and financial condition during 2014, see Risk Factors below. Despite these ongoing challenges, however, Citi remains highly focused on the continued execution of the priorities discussed above and its strategy, which continues to be to wind down Citi Holdings as soon as practicable in an economically rational manner and leverage its unique global network to: be a leading provider of financial services to the world s largest multinational corporations and investors; and be the preeminent bank for the emerging affluent and affluent consumers in the world s largest urban centers Summary Results Citigroup Citigroup reported net income of $13.7 billion and diluted earnings per share of $4.35 in 2013, compared to $7.5 billion and $2.44 per share, respectively, in In 2013, results included a credit valuation adjustment (CVA) on derivatives (counterparty and own-credit), net of hedges, and debt valuation adjustment (DVA) on Citi s fair value option debt of a pretax loss of $342 million ($213 million after-tax) as Citi s credit spreads tightened during the year, compared to a pretax loss of $2.3 billion ($1.4 billion after-tax) in Results in the third quarter of 2013 also included a $176 million tax benefit, compared to a $582 million tax benefit in the third quarter of 2012, each of which related to the resolution of certain tax audit items and were recorded in Corporate/Other. In addition, 2013 results included a $189 million after-tax benefit related to the divestiture of Credicard, Citi s non-citibank branded cards and consumer finance business in Brazil (Credicard), recorded in Corporate/Other (see Note 2 to the Consolidated Financial Statements). Citigroup s 2012 results included a pretax loss of $4.6 billion ($2.9 billion after-tax) related to the sale of minority investments (for additional information, see Corporate/Other below), as well as approximately $1.0 billion of fourth quarter 2012 pretax repositioning charges ($653 million after-tax). Excluding the items above, Citi s net income was $13.5 billion, or $4.30 per diluted share in 2013, up 11% compared to $11.9 billion, or $3.86 per share, in the prior year, as higher revenues, lower operating expenses and lower net credit losses were partially offset by a lower net loan loss reserve release and a higher effective tax rate in 2013 (see Note 9 to the Consolidated Financial Statements). (Citi s results of operations excluding the impact of CVA/DVA, the impact of the Credicard divestiture, the impact of minority investments, the repositioning charges in the fourth quarter of 2012 and the impact of the tax benefits, each as discussed above, are non-gaap financial measures. Citi believes the presentation of its results of operations excluding these impacts provides a more meaningful depiction of the underlying fundamentals of its businesses.) Citi s revenues, net of interest expense, were $76.4 billion in 2013, up 10% versus the prior year. Excluding CVA/DVA and the impact of minority investments in 2012, revenues were $76.7 billion, up 1%, as revenues in Citi Holdings increased 22% compared to the prior year, while revenues in 6

9 Citicorp were broadly unchanged. Net interest revenues of $46.8 billion were unchanged versus the prior year, largely driven by continued spread compression in Transaction Services in Citicorp, offset by improvements in Citi Holdings, principally reflecting lower funding costs. Excluding CVA/DVA and the impact of minority investments in 2012, non-interest revenues of $29.9 billion were up 2% from the prior year, principally driven by higher revenues in Securities and Banking, Latin America Regional Consumer Banking (RCB) and Transaction Services in Citicorp, as well as the absence of repurchase reserve builds for representation and warranty claims in Citi Holdings. The increase was partially offset by a decline in mortgage origination revenues, due to significantly lower U.S. mortgage refinancing activity in North America RCB, particularly in the second half of Operating Expenses Citigroup expenses decreased 3% versus the prior year to $48.4 billion. In 2013, Citi incurred legal and related costs of $3.0 billion, compared to $2.8 billion in the prior year. Excluding legal and related costs, the repositioning charges in the fourth quarter of 2012 and the impact of foreign exchange translation into U.S. dollars for reporting purposes (FX translation), which lowered reported expenses by approximately $600 million in 2013 compared to 2012, operating expenses remained relatively unchanged at $45.4 billion compared to $45.5 billion in the prior year. (Citi s results of operations excluding the impact of FX translation are non- GAAP financial measures. Citigroup believes the presentation of its results of operations excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of its businesses impacted by FX translation.) Citicorp s expenses were $42.5 billion, down 5% from the prior year, primarily reflecting efficiency savings and lower legal and related costs and repositioning charges, partially offset by volume-related expenses and ongoing investments in the businesses. In addition, as disclosed on February 28, Citicorp s expenses in the fourth quarter of 2013 were impacted as a result of a fraud discovered in Banco Nacional de Mexico (Banamex), a Citi subsidiary in Mexico. The fraud increased fourth quarter of 2013 operating expenses in Transaction Services by an estimated $400 million, with an offset to compensation expense of approximately $40 million associated with the Banamex variable compensation plan. For further information, see Institutional Clients Group Transaction Services below and Note 29 to the Consolidated Financial Statements. Citi Holdings expenses increased 13% year-over-year to $5.9 billion, primarily due to higher legal and related expenses, partially offset by the continued decline in assets and the resulting decline in operating expenses. Credit Costs and Allowance for Loan Losses Citi s total provisions for credit losses and for benefits and claims of $8.5 billion declined 25% from the prior year. Net credit losses of $10.5 billion were down 26% from Consumer net credit losses declined 27% to $10.3 billion, reflecting improvements in the North America mortgage portfolio within Citi Holdings, as well as North America Citi-branded cards and Citi retail services portfolios in Citicorp. Corporate net credit losses decreased 10% year-over-year to $201 million, driven primarily by continued credit improvement in Securities and Banking in Citicorp. The net release of allowance for loan losses and unfunded lending commitments was $2.8 billion in 2013, 27% lower than Citicorp s net reserve release declined 66% to $736 million, primarily due to a lower reserve release in North America Citi-branded cards and Citi retail services and volume-related loan loss reserve builds in international Global Consumer Banking (GCB). Citi Holdings net reserve release increased 27% to $2.0 billion, substantially all of which related to the North America mortgage portfolio. $2.6 billion of the $2.8 billion net reserve release related to Consumer lending, with the remainder applicable to Corporate. Citigroup s total allowance for loan losses was $19.6 billion at year-end 2013, or 2.98% of total loans, compared to $25.5 billion, or 3.92%, at the end of the prior year. The decline in the total allowance for loan losses reflected the continued wind down of Citi Holdings and overall continued improvement in the credit quality of the loan portfolios. The Consumer allowance for loan losses was $17.1 billion, or 4.35% of total Consumer loans, at year-end 2013, compared to $22.7 billion, or 5.57% of total loans, at year-end Total non-accrual assets fell to $9.4 billion, a 22% reduction compared to year-end Corporate non-accrual loans declined 18% to $1.9 billion, while Consumer non-accrual loans declined 23% to $7.0 billion, both reflecting continued credit improvement. Capital Citigroup s Tier 1 Capital and Tier 1 Common ratios were 13.7% and 12.6% as of December 31, 2013, respectively, compared to 14.1% and 12.7% as of December 31, Citi s estimated Tier 1 Common ratio under Basel III was 10.6% at year-end 2013, up from an estimated 8.7% at year-end Citigroup s estimated Basel III Supplementary Leverage ratio for the fourth quarter 2013 was 5.4%. (For additional information on Citi s estimated Basel III Tier 1 Common ratio, Supplementary Leverage ratio and related components, see Risk Factors Regulatory Risks and Capital Resources below.) 7

10 Citicorp Citicorp net income increased 11% from the prior year to $15.6 billion. The increase largely reflected a lower impact of CVA/DVA and lower repositioning charges, partially offset by higher provisions for income taxes. CVA/DVA, recorded in Securities and Banking, was a negative $345 million in 2013, compared to negative $2.5 billion in the prior year (for a summary of CVA/DVA by business within Securities and Banking for 2013 and comparable periods, see Institutional Clients Group below). Results in the third quarter of 2013 also included the $176 million tax benefit in 2013, compared to the $582 million tax benefit in the third quarter of 2012, and the $189 million after-tax benefit related to the divestiture of Credicard. Citicorp s full year 2012 results included a pretax loss of $53 million ($34 million after-tax) related to the sale of minority investments as well as $951 million of pretax repositioning charges in the fourth quarter of 2012 ($604 million after-tax). Excluding these items, Citicorp s net income was $15.4 billion, down 1% from the prior year, as lower operating expenses and lower net credit losses were largely offset by a lower net loan loss reserve release and a higher effective tax rate in Citicorp revenues, net of interest expense, increased 3% from the prior year to $71.8 billion. Excluding CVA/DVA and the impact of minority investments, Citicorp revenues were $72.2 billion in 2013, relatively unchanged from GCB revenues of $38.2 billion declined 2% versus the prior year. North America GCB revenues declined 6% to $19.8 billion, and international GCB revenues (consisting of Asia RCB, Latin America RCB and EMEA RCB) increased 1% year-over-year to $18.4 billion. Excluding the impact of FX translation, international GCB revenues rose 3% year-over-year, driven by 7% revenue growth in Latin America RCB, partially offset by a 1% revenue decline in both EMEA RCB and Asia RCB. Securities and Banking revenues were $23.0 billion in 2013, up 15% from the prior year. Excluding CVA/DVA, Securities and Banking revenues were $23.4 billion, or 4% higher than the prior year. Transaction Services revenues were $10.6 billion, down 1% from the prior year, but relatively unchanged excluding the impact of FX translation (for the impact of FX translation on 2013 results of operations for each of EMEA RCB, Latin America RCB, Asia RCB and Transaction Services, see the table accompanying the discussion of each respective business results of operations below). Corporate/Other revenues, excluding the impact of minority investments, increased to $77 million from $17 million in the prior year, mainly reflecting hedging gains. In North America RCB, the revenue decline was driven by lower mortgage origination revenues due to the significant decline in U.S. mortgage refinancing activity, particularly in the second half of the year, partially offset by higher revenues in Citi retail services, mostly driven by the Best Buy portfolio acquisition in the third quarter of North America RCB average deposits of $166 billion grew 8% year-over-year and average retail loans of $43 billion grew 3%. Average card loans of $107 billion declined 2%, driven by increased payment rates resulting from ongoing consumer deleveraging, while card purchase sales of $240 billion increased 3% versus the prior year. For additional information on the results of operations of North America RCB for 2013, see Global Consumer Banking North America Regional Consumer Banking below. Year-over-year, international GCB average deposits declined 2%, while average retail loans increased 6%, investment sales increased 15%, average card loans increased 3%, and international card purchase sales increased 7%, all excluding Credicard and the impact of FX translation. The decline in Asia RCB revenues, excluding the impact of FX translation, reflected the continued impact of spread compression, regulatory changes in certain markets and the ongoing repositioning of Citi s franchise in Korea. For additional information on the results of operations of Asia RCB for 2013, see Global Consumer Banking Asia Regional Consumer Banking below. In Securities and Banking, fixed income markets revenues of $13.1 billion, excluding CVA/DVA, declined 7% from the prior year, primarily reflecting industry-wide weakness in rates and currencies, partially offset by strong performance in credit-related and securitized products and commodities. Equity markets revenues of $3.0 billion in 2013, excluding CVA/DVA, were 22% above the prior year driven primarily by market share gains, continued improvement in cash and derivative trading performance and a more favorable market environment. Investment banking revenues rose 8% from the prior year to $4.0 billion, principally driven by higher revenues in equity underwriting and advisory, partially offset by lower debt underwriting revenues. Lending revenues of $1.2 billion increased 40% from the prior year, driven by lower mark-to-market losses on hedges related to accrual loans due to less significant credit spread tightening versus Excluding the mark-to-market on hedges related to accrual loans, core lending revenues decreased 4%, primarily due to increased hedge premium costs and moderately lower loan balances, partially offset by higher spreads. Private Bank revenues of $2.5 billion increased 4% from the prior year, excluding CVA/DVA, with growth across all regions and products, particularly in managed investments and capital markets. For additional information on the results of operations of Securities and Banking for 2013, see Institutional Clients Group Securities and Banking below. In Transaction Services, growth from higher deposit balances, trade loans and fees from increased market volumes was offset by continued spread compression. Excluding the impact of FX translation, Securities and Fund Services revenues increased 4%, as growth in settlement volumes and assets under custody were partially offset by spread compression related to deposits. Treasury and Trade Solutions revenues decreased 1% excluding the impact of FX translation, as the ongoing impact of spread compression globally was partially offset by higher balances and fee growth. For additional information on the results of operations of Transaction Services for 2013, see Institutional Clients Group Transaction Services below. Citicorp end-of-period loans increased 6% year-over-year to $573 billion, with 2% growth in Consumer loans and 11% growth in Corporate loans. 8

11 Citi Holdings Citi Holdings net loss was $1.9 billion in 2013 compared to a $6.5 billion net loss in The decline in the net loss year-over-year was primarily driven by the absence of the 2012 pretax loss of $4.7 billion ($2.9 billion after-tax) related to the Morgan Stanley Smith Barney joint venture (MSSB). Excluding the 2012 MSSB loss, $77 million ($49 million after-tax) of repositioning charges in the fourth quarter 2012 and CVA/DVA (positive $3 million in 2013 compared to positive $157 million in 2012), Citi Holdings net loss of $1.9 billion in 2013 improved 49% from a net loss of $3.7 billion in the prior year. The improvement in the net loss was due to significantly lower provisions for credit losses and higher revenue, partially offset by the increase in expenses driven by higher legal and related costs, as discussed above. Citi Holdings revenues increased to $4.5 billion, compared to a negative $792 million in the prior year. Excluding the 2012 MSSB loss and CVA/DVA, Citi Holdings revenues were $4.5 billion in 2013 compared to $3.7 billion in the prior year. Net interest revenues increased 22% year-over-year to $3.2 billion, largely driven by lower funding costs. Non-interest revenues, excluding the 2012 MSSB loss and CVA/DVA, increased 21% to $1.4 billion, primarily driven by lower asset marks and the lower repurchase reserve builds, partially offset by lower consumer revenues and gains on asset sales. Citi Holdings assets declined 25% year-over-year to $117 billion as of year-end 2013, and represented approximately 6% of total Citi s GAAP assets and 19% of its estimated risk-weighted assets under Basel III (based on the Advanced Approaches for determining risk-weighted assets). 9

12 FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA PAGE 1 In millions of dollars, except per-share amounts and ratios Net interest revenue $46,793 $46,686 $47,649 $53,539 $ 47,973 Non-interest revenue 29,573 22,442 29,682 32,237 31,592 Revenues, net of interest expense $76,366 $69,128 $77,331 $85,776 $ 79,565 Operating expenses 48,355 49,974 50,250 46,851 47,371 Provisions for credit losses and for benefits and claims 8,514 11,329 12,359 25,809 39,970 Income (loss) from continuing operations before income taxes $19,497 $ 7,825 $14,722 $13,116 $ (7,776) Income taxes (benefits) 5, ,575 2,217 (6,716) Income (loss) from continuing operations $13,630 $ 7,818 $11,147 $10,899 $ (1,060) Income (loss) from discontinued operations, net of taxes (1) 270 (58) 68 (16) (451) Net income (loss) before attribution of noncontrolling interests $13,900 $ 7,760 $11,215 $10,883 $ (1,511) Net income (loss) attributable to noncontrolling interests Citigroup s net income (loss) $13,673 $ 7,541 $ 11,067 $10,602 $ (1,606) Less: Preferred dividends-basic $ 194 $ 26 $ 26 $ 9 $ 2,988 Impact of the conversion price reset related to the $12.5 billion convertible preferred stock private issuance-basic 1,285 Preferred stock Series H discount accretion-basic 123 Impact of the public and private preferred stock exchange offers 3,242 Dividends and undistributed earnings allocated to employee restricted and deferred shares that contain nonforfeitable rights to dividends, applicable to Basic EPS Income (loss) allocated to unrestricted common shareholders for Basic EPS $13,216 $ 7,349 $10,855 $10,503 $ (9,246) Less: Convertible preferred stock dividends (540) Add: Interest expense, net of tax, on convertible securities and adjustment of undistributed earnings allocated to employee restricted and deferred shares that contain nonforfeitable rights to dividends, applicable to diluted EPS Income (loss) allocated to unrestricted common shareholders for diluted EPS (2) $13,217 $ 7,360 $10,872 $10,505 $ (8,706) Earnings per share (3) Basic (3) Income (loss) from continuing operations $ 4.27 $ 2.53 $ 3.71 $ 3.64 $ (7.60) Net income (loss) (7.99) Diluted (2)(3) Income (loss) from continuing operations $ 4.26 $ 2.46 $ 3.60 $ 3.53 $ (7.60) Net income (loss) (7.99) Dividends declared per common share (3) Statement continues on the next page, including notes to the table. 10

13 FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA PAGE 2 Citigroup Inc. and Consolidated Subsidiaries In millions of dollars, except per-share amounts, ratios and direct staff At December 31: Total assets $1,880,382 $1,864,660 $1,873,878 $1,913,902 $1,856,646 Total deposits 968, , , , ,903 Long-term debt 221, , , , ,019 Citigroup common stockholders equity 197, , , , ,388 Total Citigroup stockholders equity 204, , , , ,700 Direct staff (in thousands) Ratios Return on average assets 0.73% 0.39% 0.55% 0.53% (0.08)% Return on average common stockholders equity (4) (9.4) Return on average total stockholders equity (4) (1.1) Efficiency ratio Tier 1 Common (5) (8) 12.64% 12.67% 11.80% 10.75% 9.60% Tier 1 Capital (8) Total Capital (8) Leverage (6) Citigroup common stockholders equity to assets 10.51% 10.00% 9.47% 8.52% 8.21% Total Citigroup stockholders equity to assets Dividend payout ratio (7) NM NM Book value per common share (3) $ $ $ $ $ Ratio of earnings to fixed charges and preferred stock dividends 2.16x 1.37x 1.60x 1.51x NM (1) Discontinued operations for include the sale of Credicard. Discontinued operations in 2012 include a carve-out of Citi s liquid strategies business within Citi Capital Advisors. Discontinued operations in 2012 and 2011 reflect the sale of the Egg Banking credit card business. Discontinued operations for 2009 reflect the sale of Nikko Cordial Securities, Citi s German retail banking operations and the sale of CitiCapital s equipment finance unit. Discontinued operations for also include the sale of Citi s Travelers Life & Annuity, substantially all of Citigroup s international insurance business, and Citi s Argentine pension business. Discontinued operations for the second half of 2010 also reflect the sale of the Student Loan Corporation. See Note 2 to the Consolidated Financial Statements for additional information on Citi s discontinued operations. (2) The diluted EPS calculation for 2009 utilizes basic shares and income allocated to unrestricted common stockholders (Basic) due to the negative income allocated to unrestricted common stockholders. Using diluted shares and income allocated to unrestricted common stockholders (Diluted) would result in anti-dilution. (3) All per share amounts and Citigroup shares outstanding for all periods reflect Citi s 1-for-10 reverse stock split, which was effective May 6, (4) 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. (5) As currently defined by the U.S. banking regulators, the Tier 1 Common ratio represents Tier 1 Capital less non-common elements, including qualifying perpetual preferred stock, qualifying noncontrolling interests in subsidiaries and qualifying trust preferred securities divided by risk-weighted assets. (6) The leverage ratio represents Tier 1 Capital divided by quarterly adjusted average total assets. (7) Dividends declared per common share as a percentage of net income per diluted share. (8) Effective January 1, 2013, computed under Basel I credit risk capital rules and final (revised) market risk capital rules (Basel II.5). Note: The following accounting changes were adopted by Citi during the respective years: On January 1, 2010, Citi adopted ASC 810, Consolidation (formerly SFAS 166/167). Prior periods have not been restated as the standards were adopted prospectively. On January 1, 2009, Citi adopted SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (now ASC , Consolidation: Noncontrolling Interest in a Subsidiary), and FSP EITF , Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (now ASC A, Earnings Per Share: Participating Securities and the Two-Class Method). All prior periods have been restated to conform to the current period s presentation. 11

14 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 Income (loss) from continuing operations CITICORP % Change 2013 vs % Change 2012 vs Global Consumer Banking North America $ 4,068 $ 4,728 $ 4,011 (14)% 18% EMEA 59 (37) 79 NM NM Latin America 1,435 1,468 1,673 (2) (12) Asia 1,570 1,796 1,903 (13) (6) Total $ 7,132 $ 7,955 $ 7,666 (10)% 4% Securities and Banking North America $ 2,701 $ 1,250 $ 1,284 NM (3)% EMEA 1,562 1,360 2, (32) Latin America 1,189 1, (5) 36 Asia 1, (8) Total $ 6,715 $ 4,693 $ 5,109 43% (8)% Transaction Services North America $ 541 $ 466 $ % 14% EMEA 926 1,184 1,072 (22) 10 Latin America (30) 3 Asia 998 1,108 1,148 (10) (3) Total $ 2,916 $ 3,400 $ 3,251 (14)% 5% Institutional Clients Group $ 9,631 $ 8,093 $ 8,360 19% (3)% Corporate/Other $ (1,259) $ (1,702) $ (808) 26% NM Total Citicorp $15,504 $14,346 $15,218 8% (6)% Citi Holdings $ (1,874) $ (6,528) $ (4,071) 71% (60)% Income from continuing operations $13,630 $ 7,818 $11,147 74% (30)% Discontinued operations $ 270 $ (58) $ 68 NM NM Net income attributable to noncontrolling interests % 48% Citigroup s net income $13,673 $ 7,541 $11,067 81% (32)% NM Not meaningful 12

15 CITIGROUP REVENUES In millions of dollars % Change 2013 vs % Change 2012 vs CITICORP Global Consumer Banking North America $ 19,778 $ 20,949 $ 20,026 (6)% 5% EMEA 1,449 1,485 1,529 (2) (3) Latin America 9,318 8,758 8, Asia 7,624 7,928 8,023 (4) (1) Total $ 38,169 $ 39,120 $ 38,125 (2)% 3% Securities and Banking North America $ 9,045 $ 6,473 $ 7,925 40% (18)% EMEA 6,462 6,437 7,241 (11) Latin America 2,840 2,913 2,264 (3) 29 Asia 4,671 4,199 4, (2) Total $ 23,018 $ 20,022 $ 21,700 15% (8)% Transaction Services North America $ 2,502 $ 2,554 $ 2,437 (2)% 5% EMEA 3,533 3,488 3, Latin America 1,822 1,770 1, Asia 2,703 2,896 2,913 (7) (1) Total $ 10,560 $ 10,708 $ 10,431 (1)% 3% Institutional Clients Group $ 33,578 $ 30,730 $ 32,131 9% (4)% Corporate/Other $ 77 $ 70 $ % (91)% Total Citicorp $ 71,824 $ 69,920 $ 71,018 3% (2)% Citi Holdings $ 4,542 $ (792) $ 6,313 NM NM Total Citigroup net revenues $ 76,366 $ 69,128 $ 77,331 10% (11)% NM Not meaningful 13

16 This page intentionally left blank. 14

17 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 Regional Consumer Banking in North America, EMEA, Latin America and Asia) and Institutional Clients Group (which includes Securities and Banking and Transaction Services). Citicorp also includes Corporate/Other. At December 31, 2013, Citicorp had approximately $1.8 trillion of assets and $932 billion of deposits, representing 94% of Citi s total assets and 96% of Citi s total deposits, respectively. In millions of dollars except as otherwise noted % Change 2013 vs % Change 2012 vs Net interest revenue $ 43,609 $ 44,067 $ 43,923 (1)% % Non-interest revenue 28,215 25,853 27,095 9 (5) Total revenues, net of interest expense $ 71,824 $ 69,920 $ 71,018 3% (2)% Provisions for credit losses and for benefits and claims Net credit losses $ 7,393 $ 8,389 $ 11,111 (12)% (24)% Credit reserve build (release) (826) (2,222) (5,074) Provision for loan losses $ 6,567 $ 6,167 $ 6,037 6% 2% Provision for benefits and claims (10) 22 Provision for unfunded lending commitments NM (57) Total provisions for credit losses and for benefits and claims $ 6,869 $ 6,443 $ 6,322 7% 2% Total operating expenses $ 42,455 $ 44,731 $ 43,793 (5)% 2% Income from continuing operations before taxes $ 22,500 $ 18,746 $ 20,903 20% (10)% Provisions for income taxes 6,996 4,400 5, (23) Income from continuing operations $ 15,504 $ 14,346 $ 15,218 8% (6)% Income (loss) from discontinued operations, net of taxes 270 (58) 68 NM NM Noncontrolling interests (2) NM Net income $ 15,563 $ 14,072 $ 15,257 11% (8)% Balance Sheet data (in billions of dollars) Total end-of-period (EOP) assets $ 1,763 $ 1,709 $ 1,649 3% 4% Average assets 1,748 1,717 1, Return on average assets 0.89% 0.82% 0.91% Efficiency ratio (Operating expenses/total revenues) Total EOP loans $ 573 $ 540 $ Total EOP deposits NM Not meaningful 15

18 GLOBAL CONSUMER BANKING Global Consumer Banking (GCB) consists of Citigroup s four geographical Regional Consumer Banking (RCB) businesses that provide traditional banking services to retail customers through retail banking, commercial banking, Citi-branded cards and Citi retail services. GCB is a globally diversified business with 3,729 branches in 36 countries around the world as of December 31, For the year ended December 31, 2013, GCB had approximately $395 billion of average assets and $328 billion of average 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. As of December 31, 2013, Citi had consumer banking operations in 121, or 81%, of the world s top 150 cities. In credit cards and in certain retail markets, Citi serves customers in a somewhat broader set of segments and geographies. Consistent with its overall strategy, Citi intends to continue to optimize its branch footprint and further concentrate its presence in major metropolitan areas. In millions of dollars except as otherwise noted % Change 2013 vs % Change 2012 vs Net interest revenue $28,668 $28,686 $28,930 % (1)% Non-interest revenue 9,501 10,434 9,195 (9) 13 Total revenues, net of interest expense $38,169 $39,120 $38,125 (2)% 3% Total operating expenses $20,608 $21,316 $20,753 (3)% 3% Net credit losses $ 7,211 $ 8,107 $10,489 (11)% (23)% Credit reserve build (release) (669) (2,176) (4,515) Provisions for unfunded lending commitments 37 3 (100) Provision for benefits and claims (11) 23 Provisions for credit losses and for benefits and claims $ 6,791 $ 6,168 $ 6,169 10% % Income from continuing operations before taxes $10,770 $11,636 $11,203 (7)% 4% Income taxes 3,638 3,681 3,537 (1) 4 Income from continuing operations $ 7,132 $ 7,955 $ 7,666 (10)% 4% Noncontrolling interests 17 3 NM Net income $ 7,115 $ 7,952 $ 7,666 (11)% 4% Balance Sheet data (in billions of dollars) Average assets $ 395 $ 388 $ 377 2% 3% Return on average assets 1.81% 2.07% 2.06% Efficiency ratio Total EOP assets $ 405 $ 404 $ Average deposits Net credit losses as a percentage of average loans 2.50% 2.87% 3.85% Revenue by business Retail banking $16,945 $18,182 $16,517 (7)% 10% Cards (1) 21,224 20,938 21,608 1 (3) Total 38,169 39,120 38,125 (2)% 3% Income from continuing operations by business Retail banking $ 2,136 $ 3,048 $ 2,591 (30)% 18% Cards (1) 4,996 4,907 5,075 2 (3) Total $ 7,132 $ 7,955 $ 7,666 (10)% 4% (Table continues on following page). 16

19 Foreign Currency (FX) Translation Impact Total revenue-as reported $38,169 $39,120 $38,125 (2)% 3% Impact of FX translation (2) (286) (896) Total revenues-ex-fx $38,169 $38,834 $37,229 (2)% 4% Total operating expenses-as reported $20,608 $21,316 $20,753 (3)% 3% Impact of FX translation (2) (254) (655) Total operating expenses-ex-fx $20,608 $21,062 $20,098 (2)% 5% Total provisions for LLR & PBC-as reported $ 6,791 $ 6,168 $ 6,169 10% % Impact of FX translation (2) (40) (146) Total provisions for LLR & PBC-ex-FX $ 6,791 $ 6,128 $ 6,023 11% 2% Net income-as reported $ 7,115 $ 7,952 $ 7,666 (11)% 4% Impact of FX translation (2) 10 (107) Net income-ex-fx $ 7,115 $ 7,962 $ 7,559 (11)% 5% (1) Includes both Citi-branded cards and Citi retail services. (2) Reflects the impact of foreign exchange (FX) translation into U.S. dollars at 2013 average exchange rates for all periods presented. NM Not meaningful 17

20 NORTH AMERICA REGIONAL CONSUMER BANKING North America Regional Consumer Banking (NA RCB) provides traditional banking and Citi-branded cards and Citi retail services to retail customers and small- to mid-size businesses in the U.S. NA RCB s 983 retail bank branches as of December 31, 2013 are largely concentrated in the greater metropolitan areas of New York, Los Angeles, San Francisco, Chicago, Miami, Washington, D.C., Boston, Philadelphia, Dallas, Houston, San Antonio and Austin. At December 31, 2013, NA RCB had approximately 12.0 million customer accounts, $44.1 billion of retail banking loans and $170.2 billion of deposits. In addition, NA RCB had approximately million Citi-branded and Citi retail services credit card accounts, with $116.8 billion in outstanding card loan balances, including approximately 13.0 million credit card accounts and $7 billion of loans added in September 2013 as a result of the acquisition of Best Buy s U.S. credit card portfolio. In millions of dollars, except as otherwise noted % Change 2013 vs % Change 2012 vs Net interest revenue $16,659 $16,461 $16,785 1% (2)% Non-interest revenue 3,119 4,488 3,241 (31) 38 Total revenues, net of interest expense $19,778 $20,949 $20,026 (6)% 5% Total operating expenses $ 9,591 $ 9,931 $ 9,691 (3)% 2% Net credit losses $ 4,634 $ 5,756 $ 8,101 (19)% (29)% Credit reserve build (release) (1,036) (2,389) (4,181) Provisions for benefits and claims (14) 13 Provision for unfunded lending commitments 6 1 (1) NM NM Provisions for credit losses and for benefits and claims $ 3,664 $ 3,438 $ 3,981 7% (14)% Income from continuing operations before taxes $ 6,523 $ 7,580 $ 6,354 (14)% 19% Income taxes 2,455 2,852 2,343 (14) 22 Income from continuing operations $ 4,068 $ 4,728 $ 4,011 (14)% 18% Noncontrolling interests Net income $ 4,066 $ 4,727 $ 4,011 (14)% 18% Balance Sheet data (in billions of dollars) Average assets $ 175 $ 172 $ 166 2% 4% Return on average assets 2.32% 2.75% 2.42% Efficiency ratio Average deposits $ 166 $ 154 $ Net credit losses as a percentage of average loans 3.09% 3.83% 5.50% Revenue by business Retail banking $ 5,378 $ 6,686 $ 5,118 (20)% 31% Citi-branded cards 8,211 8,234 8,641 (5) Citi retail services 6,189 6,029 6,267 3 (4) Total $19,778 $20,949 $20,026 (6)% 5% Income from continuing operations by business Retail banking $ 478 $ 1,244 $ 470 (62)% NM Citi-branded cards 2,009 2,020 2,092 (1) (3) Citi retail services 1,581 1,464 1, Total $ 4,068 $ 4,728 $ 4,011 (14)% 18% NM Not meaningful 18