Edgar Filing: CITIGROUP INC

C-12.31.2014-10K

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, 2014

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.)
399 Park Avenue, New York, NY (Address of principal executive offices)		10022 (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, 2014 was approximately $142.6 billion.

Number of shares of Citigroup Inc. common stock outstanding on January 31, 2015: 3,033,851,309

Documents Incorporated by Reference: Portions of the registrant’s proxy statement for the annual meeting of stockholders scheduled to be held on April 28, 2015, 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	2–29, 32, 122–124,
		127, 158,
		307–308

1A.	Risk Factors	52–63

1B.	Unresolved Staff Comments	Not Applicable

2.	Properties	307–308

3.	Legal Proceedings—See Note 28 to the Consolidated Financial Statements	295–304

4.	Mine Safety Disclosures	Not Applicable

Part II

5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	137–138, 164, 305, 309–310

6.	Selected Financial Data	8–9

7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4–34, 65–121

7A.	Quantitative and Qualitative Disclosures About Market Risk	65–121, 159–161, 186–220, 229–288

8.	Financial Statements and Supplementary Data	132–306

9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	Not Applicable

9A.	Controls and Procedures	125–126

9B.	Other Information	Not Applicable






Part III

10.	Directors, Executive Officers and Corporate Governance	311–312*

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 28, 2015, 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 “—2014 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” 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 2014 ANNUAL REPORT ON FORM 10-K



OVERVIEW	2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
Executive Summary	4
Summary of Selected Financial Data	8
SEGMENT AND BUSINESS—INCOME (LOSS) AND REVENUES	10
CITICORP	12
Global Consumer Banking (GCB)	13
North America GCB	15
EMEA GCB	17
Latin America GCB	19
Asia GCB	21
Institutional Clients Group	23
Corporate/Other	27
CITI HOLDINGS	28
BALANCE SHEET REVIEW	30
OFF BALANCE SHEET ARRANGEMENTS	33
CONTRACTUAL OBLIGATIONS	34
CAPITAL RESOURCES	35
Current Regulatory Capital Standards
Overview
Basel III Transition Arrangements
Basel III (Full Implementation)
Supplementary Leverage Ratio
Regulatory Capital Standards Developments
Tangible Common Equity, Tangible Book Value Per Share and Book Value Per Share
RISK FACTORS	52
Managing Global Risk Table of Contents— Credit, Market (Including Funding and Liquidity), Operational and Country and Cross-Border Risk Sections	64
MANAGING GLOBAL RISK	65
Overview
Citi’s Risk Management Organization
Citi’s Compliance Organization
SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES	122
DISCLOSURE CONTROLS AND PROCEDURES	125
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING	126
FORWARD-LOOKING STATEMENTS	127
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—INTERNAL CONTROL OVER FINANCIAL REPORTING	129
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM— CONSOLIDATED FINANCIAL STATEMENTS	130



FINANCIAL STATEMENTS AND NOTES TABLE OF CONTENTS	131
CONSOLIDATED FINANCIAL STATEMENTS	132
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	141
FINANCIAL DATA SUPPLEMENT
SUPERVISION, REGULATION AND OTHER	301
Supervision and Regulation
Competition
Properties
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act
UNREGISTERED SALES OF EQUITY, PURCHASES OF EQUITY SECURITIES, DIVIDENDS	303
PERFORMANCE GRAPH
CORPORATE INFORMATION	305
Citigroup Executive Officers
Citigroup Board of Directors

OVERVIEW

Citigroup’s history dates back to the founding of the City Bank of New York in 1812. 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, 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, 2014, Citi had approximately 241,000 full-time employees, compared to approximately 251,000 full-time employees at December 31, 2013.

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.

As described above, Citigroup is managed pursuant to the following segments:

As previously announced, Citigroup intends to exit its consumer businesses in 11 markets and its consumer finance business in Korea in GCB and certain businesses in ICG. Effective in the first quarter of 2015, these businesses will be reported as part of Citi Holdings. For additional information, see “Executive Summary,” “Global Consumer Banking” and “Institutional Clients Group” below. Citi intends to release a revised Quarterly Financial Data Supplement reflecting this realignment prior to the release of its first quarter of 2015 earnings information.

The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results above.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

Steady Progress on Execution Priorities Despite Continued Challenging Operating Environment

As discussed further throughout this Form 10-K, Citi’s 2014 results reflected a continued challenging operating environment for Citi and its businesses in several respects, including:


•	the impact of macroeconomic uncertainty on the markets, trading environment and customer activity, particularly during the latter part of the year;


•	significant costs associated with legal settlements as Citi resolved its significant legacy legal issues and continued to work through its outstanding legal matters;


•	uneven global economic growth; and


•	a continued low interest rate environment.

In addition, as part of its execution priorities to improve its efficiency and reduce expenses, Citi incurred higher repositioning costs during the year, which also impacted its 2014 results of operations.

Despite these difficult decisions and challenges, Citi continued to make progress on its execution priorities in 2014, including:

•

Efficient resource allocation and disciplined expense management: As noted above, Citi continued to take actions to simplify and streamline the organization as well as improve productivity. As part of these efforts, Citi announced strategic actions to exit its consumer businesses in certain international markets in Global Consumer Banking (GCB) and certain businesses in Institutional Clients Group (ICG) to focus on those markets and businesses where it believes it has the greatest scale, growth potential and ability to provide meaningful returns to its shareholders.


•	Wind down of Citi Holdings: Citi continued to wind down Citi Holdings, including reducing its assets by $19 billion, or 16%, from year end 2013.


•	Utilization of deferred tax assets (DTAs): Citi utilized approximately $3.3 billion in DTAs during 2014 (for additional information, see “Income Taxes” below).

While making progress on these initiatives in 2014, Citi expects the operating environment in 2015 to remain challenging. Regulatory changes and requirements continue to create uncertainties for Citi and its businesses. While the U.S. economy continues to improve, it remains susceptible to global events and volatility. The economic and fiscal situations of several European countries remain fragile, and geopolitical tensions in the region have added to the uncertainties. Although most emerging market economies continue to grow, growth has slowed in some markets and these economies are also susceptible to outside macroeconomic events and challenges. The frequency with which legal and regulatory proceedings are initiated against

financial institutions, and the severity of the remedies sought in these proceedings, has increased substantially over the past several years, including 2014. Financial institutions also remain a target for an increasing number of cybersecurity attacks. For a more detailed discussion of these and other risks that could impact Citi’s businesses, results of operations and financial condition during 2015, see each respective business’ results of operations, “Risk Factors” and “Managing Global Risk” below.

While Citi may not be able to completely control these and other factors affecting its operating environment in 2015, it will remain focused on its execution priorities, as described above, and remains committed to achieving its 2015 financial targets for Citicorp’s operating efficiency ratio and Citigroup’s return on assets.

2014 Summary Results

Citigroup

Citigroup reported net income of $7.3 billion or $2.20 per diluted share, compared to $13.7 billion or $4.35 per share in 2013. In 2014, Citi’s results included negative $390 million (negative $240 million after-tax) of CVA/DVA, compared to negative $342 million (negative $213 million after-tax) in 2013 (for additional information, including Citi’s adoption of funding valuation adjustments, or FVA, in 2014, see Note 25 to the Consolidated Financial Statements). Citi’s results in 2014 also included a charge of $3.8 billion ($3.7 billion after-tax) related to the mortgage settlement announced in July 2014 regarding certain of Citi’s legacy residential mortgage-backed securities and CDO activities, recorded in Citi Holdings. Results in 2014 further included a tax charge of approximately $210 million related to corporate tax reforms enacted in two states, compared to a tax benefit of $176 million in 2013 related to the resolution of certain tax audit items, both recorded in Corporate/Other. In addition, Citi’s 2013 results included a net fraud loss in Mexico of $360 million ($235 million after-tax) recorded in ICG, and 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.

Excluding these items, Citi reported net income of $11.5 billion in 2014, or $3.55 per diluted share, compared to $13.8 billion, or $4.37 per share, in the prior year. The 16% decrease from 2013 was driven by higher expenses, a lower net loan loss reserve release and a higher effective tax rate due primarily to non-deductible legal and related expenses incurred during the year (for additional information, see Note 9 to the Consolidated Financial Statements), partially offset by increased revenues in Citi Holdings and a decline in net credit losses. (Citi’s results of operations excluding the impacts of CVA/DVA, the mortgage settlement, the tax items, the net fraud loss and the Credicard divestiture 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.)

Citi’s revenues, net of interest expense, were $76.9 billion in 2014, up 1% versus the prior year. Excluding CVA/DVA, revenues were $77.3 billion, also up 1% from 2013, as revenues rose 28% in Citi Holdings, partially offset by a 1% decline in Citicorp. Net interest revenues of $48.0 billion were 3% higher than 2013, mostly driven by lower funding costs. Excluding CVA/DVA, non-interest revenues were $29.3 billion, down 2% from 2013, driven by lower revenues in ICG and GCB in Citicorp, partially offset by higher non-interest revenues in Citi Holdings.

Expenses

Citigroup expenses increased 14% versus 2013 to $55.1 billion. Excluding the impact of the mortgage settlement in 2014 and the net fraud loss in 2013, operating expenses increased 7% versus the prior year to $51.3 billion driven by higher legal and related expenses ($5.8 billion compared to $3.0 billion in the prior year) and repositioning costs ($1.6 billion compared to $590 million in the prior year).

Excluding the legal and related expenses, net fraud loss in 2013, repositioning charges and the impact of foreign exchange translation into U.S. dollars for reporting purposes (FX translation), which lowered reported expenses by approximately $503 million in 2014 compared to 2013, expenses were roughly unchanged at $43.9 billion as repositioning savings, expense reductions in Citi Holdings and other productivity initiatives were fully offset by the impact of higher regulatory and compliance and volume-related costs. (Citi’s results of operations excluding the impact of legal and related expenses, repositioning charges and FX translation 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.)

Excluding the impact of the net fraud loss in 2013, Citicorp’s expenses were $47.3 billion, up 12% from the prior year, primarily reflecting higher legal and related expenses, largely in Corporate/Other ($4.8 billion compared to $432 million in 2013), higher repositioning costs ($1.6 billion compared to $547 million in 2013), higher regulatory and compliance costs and higher volume-related costs, partially offset by efficiency savings. Excluding the impact of the mortgage settlement in 2014, Citi Holdings’ expenses were $4.0 billion, down 34% from 2013, reflecting lower legal and related expenses as well as the ongoing decline in Citi Holdings’ assets.

Credit Costs and Allowance for Loan Losses

Citi’s total provisions for credit losses and for benefits and claims of $7.5 billion declined 12% from 2013. Excluding the impact of the mortgage settlement in 2014, total provisions for credit losses and for benefits and claims declined 13% to $7.4 billion versus the prior year. Net credit losses of $9.0 billion were down 14% versus the prior year. Consumer net credit losses declined 15% to $8.7 billion, reflecting continued improvements in the North America mortgage portfolio within Citi Holdings, as well as North America Citi-branded cards and Citi retail services in Citicorp. Corporate net credit losses increased 43% to $288 million in 2014. Corporate net credit losses in 2014 included approximately $113 million of incremental net credit losses related to the Pemex supplier program in Mexico (for additional information regarding the Pemex supplier program, see “Institutional Clients Group” below).

The net release of allowance for loan losses and unfunded lending commitments was $2.3 billion in 2014. Excluding the impact of the mortgage settlement in 2014, the net release of allowance for loan losses and unfunded lending commitments was $2.4 billion in 2014 compared to a $2.8 billion release in the prior year. Citicorp’s net reserve release increased to $1.4 billion from $736 million in 2013 due to higher reserve releases in North America GCB and ICG, reflecting improved credit trends. Citi Holdings’ net reserve release, excluding the impact of the mortgage settlement in 2014, decreased 53% to $958 million, primarily due to lower releases related to the North America mortgage portfolio (which also had lower net credit losses).

Citigroup’s total allowance for loan losses was $16.0 billion at year end, or 2.50% of total loans, compared to $19.6 billion, or 2.97%, at the end of 2013. 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 Citi’s loan portfolios. The consumer allowance for loan losses was $13.6 billion, or 3.68% of total consumer loans, at year end, compared to $17.1 billion, or 4.34% of total loans, at the end of 2013. The consumer 90+ days past due delinquencies were $4.6 billion, or 1.27% of consumer loans, at year end, a decline from $5.7 billion or 1.49% of loans in the prior year. Total non-accrual assets fell to $7.4 billion, a 22% reduction compared to 2013. Corporate non-accrual loans declined 38% to $1.2 billion, while Consumer non-accrual loans declined 17% to $5.9 billion, both reflecting the continued improvement in credit trends.

Capital

Despite the challenging operating environment and elevated legal and related expenses during 2014, Citi was able to maintain its regulatory capital, primarily through net income and the further reduction of its DTAs. Citigroup’s Basel III Tier 1 Capital and Common Equity Tier 1 Capital ratios, on a fully implemented basis, were 11.5% and 10.6% as of December 31, 2014, respectively, compared to 11.3% and 10.6% as of December 31, 2013 (all based on the Advanced Approaches for determining risk-weighted assets). Citigroup’s estimated Basel III Supplementary Leverage ratio as of December 31, 2014 was 6.0% compared to 5.4% as of

December 31, 2013, each based on the revised final U.S. Basel III rules. For additional information on Citi’s capital ratios and related components, see “Capital Resources” below.

Citicorp

Citicorp net income decreased 32% from the prior year to $10.7 billion. CVA/DVA, recorded in ICG, was negative $343 million (negative $211 million after-tax) in 2014, compared to negative $345 million (negative $214 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 as well as the impact of the net fraud loss in Mexico, the tax items and the divestiture of Credicard noted above, Citicorp’s net income was $11.1 billion, down 29% from the prior year, as higher expenses, a higher effective tax rate and lower revenues were partially offset by continued improvement in credit costs.

Citicorp revenues, net of interest expense, decreased 1% from the prior year to $71.1 billion. Excluding CVA/DVA, Citicorp revenues were $71.4 billion in 2014, also down 1% from the prior year. GCB revenues of $37.8 billion decreased 1% versus the prior year. North America GCB revenues declined 1% to $19.6 billion driven by lower retail banking revenues, partially offset by higher revenues in Citi-branded cards and Citi retail services. Retail banking revenues declined 9% to $4.9 billion versus the prior year, primarily reflecting lower mortgage origination revenues and spread compression in the deposits portfolios, partially offset by volume-related growth and gains from branch sales during the year. Citi-branded cards revenues of $8.3 billion were up 1% versus the prior year as purchase sales grew and an improvement in spreads driven by a reduction in promotional rate balances mostly offset the impact of lower average loans. Citi retail services revenues increased 4% to $6.5 billion, mainly reflecting the impact of the Best Buy portfolio 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. North America GCB average deposits of $171 billion grew 3% year-over-year and average retail loans of $46 billion grew 9%. Average card loans of $110 billion increased 2%, and purchase sales of $252 billion increased 5% versus the prior year. For additional information on the results of operations of North America GCB for 2014, see “Global Consumer Banking—North America GCB” below.

International GCB revenues (consisting of EMEA GCB, Latin America GCB and Asia GCB) decreased 2% versus the prior year to $18.1 billion. Excluding the impact of FX translation, international GCB revenues rose 2% from the prior year, driven by 4% growth in Latin America GCB and 1% growth in Asia GCB, partially offset by a 1% decline in EMEA GCB (for the impact of FX translation on 2014 results of operations for each of EMEA GCB, Latin America GCB and Asia GCB, see the table accompanying the discussion of each respective business’ results of operations below). The growth in international GCB revenues, excluding the impact of FX translation, mainly reflected volume growth in all regions, partially offset by spread compression, the ongoing impact of regulatory changes and the repositioning of Citi’s franchise in

Korea, as well as market exits in EMEA GCB in 2013. For additional information on the results of operations of EMEA GCB, Latin America GCB and Asia GCB for 2014, see “Global Consumer Banking” below. Year-over-year, international GCB average deposits increased 2%, average retail loans increased 7%, investment sales increased 8%, average card loans increased 2% and card purchase sales increased 5%, all excluding the impact of Credicard’s results in the prior year period and FX translation.

ICG revenues were $33.3 billion in 2014, down 1% from the prior year. Excluding CVA/DVA, ICG revenues were $33.6 billion, also down 1% from the prior year. Banking revenues of $17.0 billion, excluding CVA/DVA and the impact of mark-to-market gains/(losses) on hedges related to accrual loans within corporate lending (see below), increased 5% from the prior year, primarily reflecting growth in investment banking, corporate lending and private bank revenues. Investment banking revenues increased 7% versus the prior year, driven by an 11% increase in advisory revenues to $949 million and an 18% increase in equity underwriting to $1.2 billion. Debt underwriting revenues of $2.5 billion were largely unchanged from 2013. Private bank revenues, excluding CVA/DVA, increased 7% to $2.7 billion from the prior year, driven by increased client volumes and growth in investment and capital markets products, partially offset by spread compression. Corporate lending revenues rose 52% to $1.9 billion, including $116 million of mark-to-market gains on hedges related to accrual loans compared to a $287 million loss in the prior year. Excluding the mark-to-market impact on hedges related to accrual loans in both periods, corporate lending revenues rose 15% versus the prior year to $1.7 billion, primarily reflecting growth in average loans and improved funding costs. Treasury and trade solutions revenues increased by 1% versus the prior year to $7.9 billion as volume and fee growth was largely offset by the impact of spread compression globally.

Markets and securities services revenues of $16.5 billion, excluding CVA/DVA, decreased 8% from the prior year. Fixed income markets revenues of $11.8 billion, excluding CVA/DVA, decreased 11% from the prior year, reflecting weakness across rates and currencies, credit markets and municipals due to challenging trading conditions, partially offset by increased securitized products and commodities revenues. The first half of 2013 included a strong performance in rates and currencies, driven in part by the impact of quantitative easing globally. Equity markets revenues of $2.8 billion, excluding CVA/DVA, declined 1% versus the prior year, mostly reflecting weakness in cash equities in EMEA driven by volatility in Europe, partially offset by strength in prime finance. Securities services revenues of $2.3 billion increased 3% versus the prior year primarily due to increased volumes, assets under custody and overall client activity. For additional information on the results of operations of ICG for 2014, see “Institutional Clients Group” below.

Corporate/Other revenues decreased to $47 million from $121 million in the prior year, driven mainly by lower revenues from sales of available-for-sale securities as well as hedging activities. For additional information on the results of

operations of Corporate/Other in 2014, see “Corporate/Other” below.

Citicorp end-of-period loans were roughly unchanged at $572 billion, with 1% growth in corporate loans offset by a 2% decline in consumer loans. Excluding the impact of FX translation, Citicorp loans grew 3%, with 4% growth in corporate loans and 2% growth in consumer loans.

Citi Holdings

Citi Holdings’ net loss was $3.4 billion in 2014 compared to a net loss of $1.9 billion in 2013. CVA/DVA was negative $47 million (negative $29 million after-tax) in 2014, compared to positive $3 million (positive $1 million after-tax) in the prior year. Excluding the impact of CVA/DVA and the mortgage settlement in 2014, Citi Holdings’ net income was $385 million, reflecting lower expenses, higher revenues and lower net credit losses, partially offset by a lower net loan loss reserve release.

Citi Holdings’ revenues increased 27% to $5.8 billion from the prior year. Excluding CVA/DVA, Citi Holdings’ revenues increased 28% to $5.9 billion from the prior year. Net interest revenues increased 11% year-over-year to $3.5 billion, largely driven by lower funding costs. Non-interest revenues, excluding CVA/DVA, increased 68% to $2.3 billion from the prior year, primarily driven by higher gains on assets sales and the absence of repurchase reserve builds for representation and warranty claims in 2014. For additional information on the results of operations of Citi Holdings in 2014, see “Citi Holdings” below.

Citi Holdings’ assets were $98 billion, 16% below the prior year, and represented approximately 5% of Citi’s total GAAP assets and 14% of its risk-weighted assets under Basel III as of year end (based on the Advanced Approaches for determining risk-weighted assets).

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	2014			2013		2012			2011		2010
Net interest revenue	$	47,993		$	46,793	$	46,686		$	47,649	$	53,539
Non-interest revenue	28,889			29,626		22,504			29,612		32,210
Revenues, net of interest expense	$	76,882		$	76,419	$	69,190		$	77,261	$	85,749
Operating expenses	55,051			48,408		50,036			50,180		46,824
Provisions for credit losses and for benefits and claims	7,467			8,514		11,329			12,359		25,809
Income from continuing operations before income taxes	$	14,364		$	19,497	$	7,825		$	14,722	$	13,116
Income taxes	6,864			5,867		7			3,575		2,217
Income from continuing operations	$	7,500		$	13,630	$	7,818		$	11,147	$	10,899
Income (loss) from discontinued operations, net of taxes ⁽¹⁾	(2		)	270		(58		)	68		(16		)
Net income before attribution of noncontrolling interests	$	7,498		$	13,900	$	7,760		$	11,215	$	10,883
Net income attributable to noncontrolling interests	185			227		219			148		281
Citigroup’s net income	$	7,313		$	13,673	$	7,541		$	11,067	$	10,602
Less:
Preferred dividends-Basic	$	511		$	194	$	26		$	26	$	9
Dividends and undistributed earnings allocated to employee restricted and deferred shares that contain nonforfeitable rights to dividends, applicable to basic EPS	111			263		166			186		90
Income allocated to unrestricted common shareholders for basic EPS	$	6,691		$	13,216	$	7,349		$	10,855	$	10,503
Add: Interest expense, net of tax, dividends on convertible securities and adjustment of undistributed earnings allocated to employee restricted and deferred shares with nonforfeitable rights to dividends, applicable to diluted EPS	—			1		11			17		2
Income allocated to unrestricted common shareholders for diluted EPS	$	6,691		$	13,217	$	7,360		$	10,872	$	10,505
Earnings per share
Basic
Income from continuing operations	$	2.21		$	4.27	$	2.53		$	3.71	$	3.64
Net income	2.21			4.35		2.51			3.73		3.65
Diluted
Income from continuing operations	$	2.20		$	4.26	$	2.46		$	3.60	$	3.53
Net income	2.20			4.35		2.44			3.63		3.54
Dividends declared per common share	0.04			0.04		0.04			0.03		—

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

SUMMARY OF SELECTED FINANCIAL DATA—PAGE 2



	Citigroup Inc. and Consolidated Subsidiaries
In millions of dollars, except per-share amounts, ratios and direct staff	2014			2013			2012			2011			2010
At December 31:
Total assets	$	1,842,530		$	1,880,382		$	1,864,660		$	1,873,878		$	1,913,902
Total deposits ⁽²⁾	899,332			968,273			930,560			865,936			844,968
Long-term debt	223,080			221,116			239,463			323,505			381,183
Citigroup common stockholders’ equity	200,066			197,601			186,487			177,494			163,156
Total Citigroup stockholders’ equity	210,534			204,339			189,049			177,806			163,468
Direct staff (in thousands)	241			251			259			266			260
Performance metrics
Return on average assets	0.39		%	0.73		%	0.39		%	0.55		%	0.53		%
Return on average common stockholders’ equity ⁽³⁾	3.4			7.0			4.1			6.3			6.8
Return on average total stockholders’ equity ⁽³⁾	3.5			6.9			4.1			6.3			6.8
Efficiency ratio (Operating expenses/Total revenues)	72			63			72			65			55
Basel III ratios - full implementation
Common Equity Tier 1 Capital ⁽⁴⁾	10.58		%	10.59		%	8.74		%	N/A			N/A
Tier 1 Capital ⁽⁴⁾	11.47			11.25			9.05			N/A			N/A
Total Capital ⁽⁴⁾	12.81			12.65			10.83			N/A			N/A
Estimated supplementary leverage ratio ⁽⁵⁾	5.96			5.43			N/A			N/A			N/A
Citigroup common stockholders’ equity to assets	10.86		%	10.51		%	10.00		%	9.47		%	8.52		%
Total Citigroup stockholders’ equity to assets	11.43			10.87			10.14			9.49			8.54
Dividend payout ratio ⁽⁶⁾	1.8			0.9			1.6			0.8			NM
Book value per common share	$	66.16		$	65.23		$	61.57		$	60.70		$	56.15
Ratio of earnings to fixed charges and preferred stock dividends	1.98x			2.16x			1.37x			1.60x			1.51x


(1)	Discontinued operations include Credicard, Citi Capital Advisors and Egg Banking credit card business. See Note 2 to the Consolidated Financial Statements for additional information on Citi’s discontinued operations.


(2)	Reflects reclassification of approximately $21 billion of deposits to held-for-sale (Other liabilities) at December 31, 2014 as a result of the agreement to sell Citi’s retail banking business in Japan. See “Asia GCB” below and Note 2 to the Consolidated Financial Statements.


(3)	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.


(4)	Capital ratios based on the final 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. See “Capital Resources” below.

(5)

Citi’s estimated Supplementary Leverage ratio is based on the revised final U.S. Basel III rules issued in September 2014 and represents the ratio of Tier 1 Capital to Total Leverage Exposure (TLE). TLE is the sum of the daily average of on balance sheet assets for the quarter and the average of certain off balance sheet exposures calculated as of the last day of each month in the quarter, less applicable Tier 1 Capital deductions. See “Capital Resources” below.

(6) Dividends declared per common share as a percentage of net income per diluted share.

N/A Not applicable to 2012, 2011 and 2010. See “Capital Resources” below.

NM Not meaningful

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	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Income (loss) from continuing operations
CITICORP
Global Consumer Banking
North America	$	4,421		$	3,910		$	4,564		13	%	(14	)%
EMEA	(7		)	35			(61		)	NM		NM
Latin America	1,204			1,337			1,382			(10	)	(3	)
Asia	1,320			1,481			1,712			(11	)	(13	)
Total	$	6,938		$	6,763		$	7,597		3	%	(11	)%
Institutional Clients Group
North America	$	3,896		$	3,143		$	1,598		24	%	97	%
EMEA	1,984			2,432			2,467			(18	)	(1	)
Latin America	1,337			1,628			1,879			(18	)	(13	)
Asia	2,304			2,211			1,890			4		17
Total	$	9,521		$	9,414		$	7,834		1	%	20	%
Corporate/Other	$	(5,593	)	$	(630	)	$	(1,048	)	NM		40	%
Total Citicorp	$	10,866		$	15,547		$	14,383		(30	)%	8	%
Citi Holdings	$	(3,366	)	$	(1,917	)	$	(6,565	)	(76	)%	71	%
Income from continuing operations	$	7,500		$	13,630		$	7,818		(45	)%	74	%
Discontinued operations	$	(2	)	$	270		$	(58	)	NM		NM
Net income attributable to noncontrolling interests	185			227			219			(19	)%	4	%
Citigroup’s net income	$	7,313		$	13,673		$	7,541		(47	)%	81	%

NM Not meaningful

CITIGROUP REVENUES



In millions of dollars	2014		2013		2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
CITICORP
Global Consumer Banking
North America	$	19,645	$	19,776	$	20,950		(1	)%	(6	)%
EMEA	1,358		1,449		1,485			(6	)	(2	)
Latin America	9,204		9,316		8,742			(1	)	7
Asia	7,546		7,624		7,928			(1	)	(4	)
Total	$	37,753	$	38,165	$	39,105		(1	)%	(2	)%
Institutional Clients Group
North America	$	12,345	$	11,473	$	8,973		8	%	28	%
EMEA	9,513		10,020		9,977			(5	)	—
Latin America	4,237		4,692		4,710			(10	)	—
Asia	7,172		7,382		7,102			(3	)	4
Total	$	33,267	$	33,567	$	30,762		(1	)%	9	%
Corporate/Other	$	47	$	121	$	128		(61	)%	(5	)%
Total Citicorp	$	71,067	$	71,853	$	69,995		(1	)%	3	%
Citi Holdings	$	5,815	$	4,566	$	(805	)	27	%	NM
Total Citigroup net revenues	$	76,882	$	76,419	$	69,190		1	%	10	%

NM Not meaningful

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 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, 2014, Citicorp had $1.7 trillion of assets and $889 billion of deposits, representing 95% of Citi’s total assets and 99% of Citi’s total deposits, respectively.



In millions of dollars except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	44,452		$	43,609		$	44,067		2	%	(1	)%
Non-interest revenue	26,615			28,244			25,928			(6	)	9
Total revenues, net of interest expense	$	71,067		$	71,853		$	69,995		(1	)%	3	%
Provisions for credit losses and for benefits and claims
Net credit losses	$	7,327		$	7,393		$	8,389		(1	)%	(12	)%
Credit reserve build (release)	(1,252		)	(826		)	(2,222		)	(52	)	63
Provision for loan losses	$	6,075		$	6,567		$	6,167		(7	)%	6	%
Provision for benefits and claims	199			212			236			(6	)	(10	)
Provision for unfunded lending commitments	(152		)	90			40			NM		NM
Total provisions for credit losses and for benefits and claims	$	6,122		$	6,869		$	6,443		(11	)%	7	%
Total operating expenses	$	47,336		$	42,438		$	44,773		12	%	(5	)%
Income from continuing operations before taxes	$	17,609		$	22,546		$	18,779		(22	)%	20	%
Income taxes	6,743			6,999			4,396			(4	)	59
Income from continuing operations	$	10,866		$	15,547		$	14,383		(30	)%	8	%
Income (loss) from discontinued operations, net of taxes	(2		)	270			(58		)	NM		NM
Noncontrolling interests	181			211			216			(14	)	(2	)
Net income	$	10,683		$	15,606		$	14,109		(32	)%	11	%
Balance sheet data (in billions of dollars)
Total end-of-period (EOP) assets	$	1,745		$	1,763		$	1,709		(1	)%	3	%
Average assets	1,788			1,749			1,717			2		2
Return on average assets	0.60		%	0.89		%	0.82		%
Efficiency ratio (Operating expenses/Total revenues)	67			59			64
Total EOP loans	$	572		$	573		$	540		—		6
Total EOP deposits	889			932			863			(5	)	8

NM Not meaningful

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, commercial banking, Citi-branded cards and Citi retail services (for additional information on these businesses, see “Citigroup Segments” above). GCB is a globally diversified business with 3,280 branches in 35 countries around the world as of December 31, 2014. For the year ended December 31, 2014, GCB had $399 billion of average assets and $331 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. In credit cards and in certain retail markets, Citi serves customers in a somewhat broader set of segments and geographies.

Consistent with its strategy to continue to optimize its branch footprint and further concentrate its presence in major metropolitan areas, during 2014, Citi announced that it intends to exit its consumer businesses in the following markets: Costa Rica, El Salvador, Guatemala, Nicaragua, Panama and Peru (in Latin America); Japan, Guam and its consumer finance business in Korea (in Asia); and the Czech Republic, Egypt and Hungary (in EMEA). Citi expects to substantially complete its exit from these businesses by the end of 2015. These consumer businesses, consisting of $28 billion of assets, $7 billion of consumer loans and $3 billion of deposits (excluding approximately $21 billion of deposits reclassified to held-for-sale as a result of Citi’s agreement in December 2014 to sell its Japan retail banking business) as of December 31, 2014, contributed approximately $1.6 billion of revenues, $1.4 billion of expenses and a net loss of $40 million in 2014, with the loss primarily attributable to repositioning and other actions directly related to the exit plans. These businesses will be reported as part of Citi Holdings beginning in the first quarter of 2015. For additional information, see “Executive Summary” above and “Latin America GCB” and “Asia GCB” below.



In millions of dollars except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	28,910		$	28,648		$	28,665		1	%	—	%
Non-interest revenue	8,843			9,517			10,440			(7	)	(9	)
Total revenues, net of interest expense	$	37,753		$	38,165		$	39,105		(1	)%	(2	)%
Total operating expenses	$	21,277		$	21,187		$	21,872		—	%	(3	)%
Net credit losses	$	7,051		$	7,211		$	8,107		(2	)%	(11	)%
Credit reserve build (release)	(1,162		)	(669		)	(2,176		)	(74	)	69
Provision (release) for unfunded lending commitments	(23		)	37			—			NM		—
Provision for benefits and claims	199			212			237			(6	)	(11	)
Provisions for credit losses and for benefits and claims	$	6,065		$	6,791		$	6,168		(11	)%	10	%
Income from continuing operations before taxes	$	10,411		$	10,187		$	11,065		2	%	(8	)%
Income taxes	3,473			3,424			3,468			1		(1	)
Income from continuing operations	$	6,938		$	6,763		$	7,597		3	%	(11	)%
Noncontrolling interests	26			17			3			53		NM
Net income	$	6,912		$	6,746		$	7,594		2	%	(11	)%
Balance Sheet data (in billions of dollars)
Average assets	$	399		$	395		$	388		1	%	2	%
Return on average assets	1.73		%	1.71		%	1.98		%
Efficiency ratio	56			56			56
Total EOP assets	$	396		$	405		$	404		(2	)	—
Average deposits	331			327			322			1		2
Net credit losses as a percentage of average loans	2.37		%	2.51		%	2.87		%
Revenue by business
Retail banking	$	16,354		$	16,941		$	18,167		(3	)%	(7	)%
Cards ⁽¹⁾	21,399			21,224			20,938			1		1
Total	$	37,753		$	38,165		$	39,105		(1	)%	(2	)%
Income from continuing operations by business
Retail banking	$	1,776		$	1,907		$	2,794		(7	)%	(32	)%
Cards ⁽¹⁾	5,162			4,856			4,803			6		1
Total	$	6,938		$	6,763		$	7,597		3	%	(11	)%

(Table continues on next page.)



Foreign currency (FX) translation impact
Total revenue-as reported	$	37,753	$	38,165		$	39,105		(1	)%	(2	)%
Impact of FX translation ⁽²⁾	—		(674		)	(890		)
Total revenues-ex-FX	$	37,753	$	37,491		$	38,215		1	%	(2	)%
Total operating expenses-as reported	$	21,277	$	21,187		$	21,872		—	%	(3	)%
Impact of FX translation ⁽²⁾	—		(373		)	(630		)
Total operating expenses-ex-FX	$	21,277	$	20,814		$	21,242		2	%	(2	)%
Total provisions for LLR & PBC-as reported	$	6,065	$	6,791		$	6,168		(11	)%	10	%
Impact of FX translation ⁽²⁾	—		(122		)	(136		)
Total provisions for LLR & PBC-ex-FX	$	6,065	$	6,669		$	6,032		(9	)%	11	%
Net income-as reported	$	6,912	$	6,746		$	7,594		2	%	(11	)%
Impact of FX translation ⁽²⁾	—		(120		)	(79		)
Net income-ex-FX	$	6,912	$	6,626		$	7,515		4	%	(12	)%


(1)	Includes both Citi-branded cards and Citi retail services.


(2)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the fourth quarter of 2014 average exchange rates for all periods presented.

NM Not meaningful

NORTH AMERICA GCB

North America GCB provides traditional banking and Citi-branded cards and Citi retail services to retail customers and small to mid-size businesses in the U.S. North America GCB’s 849 retail bank branches as of December 31, 2014 are largely concentrated in the greater metropolitan areas of New York, Chicago, Miami, Washington, D.C., Boston, Los Angeles and San Francisco.

At December 31, 2014, North America GCB had approximately 11.7 million retail banking customer accounts, $46.8 billion of retail banking loans and $171.4 billion of deposits. In addition, North America GCB had approximately 111.7 million Citi-branded and Citi retail services credit card accounts, with $114.0 billion in outstanding card loan balances.



In millions of dollars, except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	17,200		$	16,658		$	16,460		3	%	1	%
Non-interest revenue	2,445			3,118			4,490			(22	)	(31	)
Total revenues, net of interest expense	$	19,645		$	19,776		$	20,950		(1	)%	(6	)%
Total operating expenses	$	9,676		$	9,850		$	10,204		(2	)%	(3	)%
Net credit losses	$	4,203		$	4,634		$	5,756		(9	)%	(19	)%
Credit reserve build (release)	(1,241		)	(1,036		)	(2,389		)	(20	)	57
Provisions for benefits and claims	41			60			70			(32	)	(14	)
Provision for unfunded lending commitments	(8		)	6			1			NM		NM
Provisions for credit losses and for benefits and claims	$	2,995		$	3,664		$	3,438		(18	)%	7	%
Income from continuing operations before taxes	$	6,974		$	6,262		$	7,308		11	%	(14	)%
Income taxes	2,553			2,352			2,744			9		(14	)
Income from continuing operations	$	4,421		$	3,910		$	4,564		13	%	(14	)%
Noncontrolling interests	(1		)	2			1			NM		100
Net income	$	4,422		$	3,908		$	4,563		13	%	(14	)%
Balance Sheet data (in billions of dollars)
Average assets	$	178		$	175		$	172		2	%	2	%
Return on average assets	2.48		%	2.23		%	2.65		%
Efficiency ratio	49			50			49
Average deposits	$	170.7		$	166.0		$	153.9		3		8
Net credit losses as a percentage of average loans	2.69		%	3.09		%	3.83		%
Revenue by business
Retail banking	$	4,901		$	5,376		$	6,687		(9	)%	(20	)%
Citi-branded cards	8,282			8,211			8,234			1		—
Citi retail services	6,462			6,189			6,029			4		3
Total	$	19,645		$	19,776		$	20,950		(1	)%	(6	)%
Income from continuing operations by business
Retail banking	$	349		$	411		$	1,136		(15	)%	(64	)%
Citi-branded cards	2,402			1,942			1,988			24		(2	)
Citi retail services	1,670			1,557			1,440			7		8
Total	$	4,421		$	3,910		$	4,564		13	%	(14	)%

NM Not meaningful

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. Net interest revenue increased 3% primarily due to an increase in average loans in Citi retail services driven by the Best Buy portfolio acquisition in September 2013 and continued volume growth in retail banking, which more than offset lower average loans in Citi-branded cards. Non-interest revenue decreased 22%, driven by lower mortgage origination revenues due to significantly lower U.S. mortgage refinancing activity and a continued decline in revenues in Citi retail services, primarily reflecting improving credit and the resulting impact on contractual partner payments, partially offset by a 5% increase in total card purchase sales to $252 billion and gains during the year from branch sales (approximately $130 million).

Retail banking revenues of $4.9 billion decreased 9% due to the lower mortgage origination revenues and spread compression in the deposit portfolios, which began to abate during the latter part of the year, partially offset by continued volume-related growth and the gains from branch sales. Consistent with GCB’s strategy, during 2014, NA GCB closed or sold over 130 branches (a 14% decline from the prior year), with announced plans to sell or close an additional 60 branches in early 2015. Average loans of $46 billion increased 9% and average deposits of $171 billion increased 3%.

Cards revenues increased 2% as average loans of $110 billion 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 (3% decline from 2013). 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. In addition, while the business experienced modest full rate loan growth during 2014, growth in full rate loan balances began to slow during the latter part of the year. Combined with the continued reduction in promotional balances, NA GCB could experience pressure on full rate loan growth during 2015.

Citi retail services revenues increased 4% primarily due to a 12% increase in average loans driven by the Best Buy acquisition, 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. Purchase sales in Citi retail services increased 7% from 2013, driven by the acquisition of the Best Buy portfolio.

With respect to both cards portfolios, as widely publicized, U.S. gas prices declined during 2014, particularly in the fourth quarter. The decline in gas prices has negatively impacted purchase sales in the fuel portfolios, particularly in Citi retail services, and consumer savings from lower gas

prices may not result in higher spending in other spend categories. NA GCB will continue to monitor trends in this area going into 2015.

Expenses decreased 2% 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. Cost reduction initiatives included the ongoing repositioning of the mortgage business due to the decline in mortgage refinancing activity, as well as continued rationalization of the branch footprint, including reducing the number of overall branches, as discussed above.

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 to $1.2 billion 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. Given the improvement in credit within the cards portfolios during 2014, NA GCB would not expect to see similar levels of loan loss reserve releases in 2015.

2013 vs. 2012

Net income decreased 14%, mainly driven by lower revenues and lower loan loss reserve releases, partially offset by lower net credit losses and expenses.

Revenues decreased 6% primarily due to lower retail banking revenues. The decline in retail banking revenues was primarily due to lower mortgage origination revenues driven by the significantly lower U.S. mortgage refinancing activity and ongoing spread compression in the deposit portfolios, partially offset by growth in average deposits, average commercial loans and average retail loans.

Cards revenues increased 1%. In Citi-branded cards, revenues were unchanged as continued improvement in net interest spreads, reflecting higher yields as promotional balances represented a smaller percentage of the portfolio total as well as lower funding costs, were offset by a decline in average loans. Citi retail services revenues increased 3% primarily due to the acquisition of the Best Buy portfolio, partially offset by improving credit and the resulting impact on contractual partner payments.

Expenses decreased 3%, primarily due to lower legal and related costs and repositioning savings, partially offset by higher mortgage origination costs and expenses in cards as a result of the Best Buy portfolio acquisition.

Provisions increased 7%, as lower net credit losses in the Citi-branded cards and Citi retail services portfolios were offset by lower loan loss reserve releases ($1.0 billion in 2013 compared to $2.4 billion in 2012), primarily related to cards, as well as reserve builds for new loans originated in the Best Buy portfolio.

EMEA GCB

EMEA GCB provides traditional banking and Citi-branded card services to retail customers and small to mid-size businesses, primarily in Central and Eastern Europe and the Middle East. The countries in which EMEA GCB has the largest presence are Poland, Russia and the United Arab Emirates.

At December 31, 2014, EMEA GCB had 137 retail bank branches with approximately 3.1 million retail banking customer accounts, $5.4 billion in retail banking loans, $12.8 billion in deposits, and 2.0 million Citi-branded card accounts with $2.2 billion in outstanding card loan balances.



In millions of dollars, except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	899		$	948		$	1,010		(5	)%	(6	)%
Non-interest revenue	459			501			475			(8	)	5
Total revenues, net of interest expense	$	1,358		$	1,449		$	1,485		(6	)%	(2	)%
Total operating expenses	$	1,283		$	1,359		$	1,469		(6	)%	(7	)%
Net credit losses	$	61		$	68		$	105		(10	)%	(35	)%
Credit reserve build (release)	24			(18		)	(5		)	NM		NM
Provision for unfunded lending commitments	2			—			(1		)	100		100
Provisions for credit losses	$	87		$	50		$	99		74	%	(49	)%
Income (loss) from continuing operations before taxes	$	(12	)	$	40		$	(83	)	NM		NM
Income taxes (benefits)	(5		)	5			(22		)	NM		NM
Income (loss) from continuing operations	$	(7	)	$	35		$	(61	)	NM		NM
Noncontrolling interests	20			11			4			82	%	NM
Net income (loss)	$	(27	)	$	24		$	(65	)	NM		NM
Balance Sheet data (in billions of dollars)
Average assets	$	10		$	10		$	9		—	%	11	%
Return on average assets	(0.27		)%	0.24		%	(0.72		)%
Efficiency ratio	94			94			99
Average deposits	$	13.1		$	12.6		$	12.6		4		—
Net credit losses as a percentage of average loans	0.75		%	0.85		%	1.40		%
Revenue by business
Retail banking	$	844		$	868		$	873		(3	)%	(1	)%
Citi-branded cards	514			581			612			(12	)	(5	)
Total	$	1,358		$	1,449		$	1,485		(6	)%	(2	)%
Income (loss) from continuing operations by business
Retail banking	$	(30	)	$	(42	)	$	(109	)	29	%	61	%
Citi-branded cards	23			77			48			(70	)	60
Total	$	(7	)	$	35		$	(61	)	NM		NM
Foreign currency (FX) translation impact
Total revenues-as reported	$	1,358		$	1,449		$	1,485		(6	)%	(2	)%
Impact of FX translation ⁽¹⁾	—			(72		)	(77		)
Total revenues-ex-FX	$	1,358		$	1,377		$	1,408		(1	)%	(2	)%
Total operating expenses-as reported	$	1,283		$	1,359		$	1,469		(6	)%	(7	)%
Impact of FX translation ⁽¹⁾	—			(59		)	(79		)
Total operating expenses-ex-FX	$	1,283		$	1,300		$	1,390		(1	)%	(6	)%
Provisions for credit losses-as reported	$	87		$	50		$	99		74	%	(49	)
Impact of FX translation ⁽¹⁾	—			(6		)	(6		)
Provisions for credit losses-ex-FX	$	87		$	44		$	93		98	%	(53	)%
Net income (loss)-as reported	$	(27	)	$	24		$	(65	)	NM		NM
Impact of FX translation ⁽¹⁾	—			7			9
Net income (loss)-ex-FX	$	(27	)	$	31		$	(56	)	NM		NM


(1)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the fourth quarter of 2014 average exchange rates for all periods presented.


NM	Not meaningful

The discussion of the results of operations for EMEA 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. Citi believes the presentation of EMEA GCB’s results excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of certain of these metrics to the reported results, see the table above.

2014 vs. 2013

Net income declined $58 million to a net loss of $27 million as higher credit costs and lower revenues were partially offset by lower expenses.

Revenues decreased 1%, driven by lower revenues resulting from the sales of Citi’s consumer operations in Turkey and Romania during 2013, spread compression and the absence of the prior-year gain related to the Turkey sale, largely offset by volume growth. Net interest revenue was roughly unchanged as spread compression was offset by growth in average retail loans. Non-interest revenue decreased 4%, mainly reflecting lower revenues due to the sales of the consumer operations in Turkey and Romania, partially offset by higher investment fees due to increased sales of higher spread investment products.

Retail banking revenues increased 2%, primarily due to increases in investment sales (3%), average deposits (5%) and average retail loans (11%), partially offset by the impact of the sales of the consumer operations in Turkey and Romania. Cards revenues declined 6%, primarily due to spread compression, interest rate caps, particularly in Poland, and the impact of the sales of the consumer operations in Turkey and Romania. Continued regulatory changes, including caps on interchange rates in Poland, and spread compression will likely continue to negatively impact revenues in EMEA GCB in 2015.

Expenses decreased 1%, primarily due to the impact of the sales of the consumer operations in Turkey and Romania and efficiency savings, which were largely offset by higher repositioning charges, continued investment spending on new internal operating platforms and volume-related expenses.

Provisions increased 98% to $87 million driven by a loan loss reserve build mainly related to Citi’s consumer business in Russia due to the ongoing economic situation in Russia (as discussed below), partially offset by a 1% decline in net credit losses.

Russia

Citi’s ability to grow its consumer business in Russia has been negatively impacted by actions Citi has taken to mitigate its risks and exposures in response to the ongoing political instability, such as limiting its exposure to additional credit risk. In addition, the ongoing economic situation in Russia, coupled with consumer overleveraging in the market, has negatively impacted consumer credit, particularly delinquencies in the Russian card and personal installment loan portfolios (which totaled $1.2 billion as of December 31, 2014, or 0.4% of total GCB loans), and Citi currently expects these trends could continue into 2015. Citi has taken these trends into consideration in determining its allowance for loan loss reserves. Any further actions Citi may take to mitigate its exposures or risks, or the imposition of additional sanctions (such as asset freezes) involving Russia or against Russian entities, business sectors, individuals or otherwise, could further negatively impact the results of operations of EMEA GCB. For additional information on Citi’s exposures in Russia, see “Managing Global Risk—Country and Cross-Border Risk” below.

2013 vs. 2012

Net income of $31 million compared to a net loss of $56 million in 2012 as lower expenses and lower net credit losses were partially offset by lower revenues, primarily due to the impact of the sales of Citi’s consumer operations in Turkey and Romania.

Revenues decreased 2%, mainly driven by the lower revenues resulting from the sales of the consumer operations in Turkey and Romania, partially offset by higher volumes in core markets and a gain related to the Turkey sale.

Retail banking revenues decreased 1%, driven by the sales of the consumer operations in Turkey and Romania, partially offset by increases in average deposits (1%) and average retail loans (13%) as well as the gain related to the Turkey sale. Cards revenues declined 4%, primarily due to spread compression and interest rate caps, particularly in Poland, and an 8% decrease in average cards loans, primarily due to the sales of the consumer operations in Turkey and Romania.

Expenses declined 6%, primarily due to repositioning savings as well as lower repositioning charges, partially offset by higher volume-related expenses and continued investment spending on new internal operating platforms.

Provisions declined 53% due to a 37% decrease in net credit losses largely resulting from the impact of the sales of the consumer operations in Turkey and Romania and a net credit recovery in the second quarter 2013.

LATIN AMERICA GCB

Latin America GCB provides traditional banking and Citi-branded card services to retail customers and small to mid-size businesses, with the largest presence in Mexico and Brazil. Latin America GCB includes branch networks throughout Latin America as well as Banco Nacional de Mexico, or Banamex, Mexico’s second-largest bank, with 1,542 branches as of December 31, 2014. As previously announced, in the fourth quarter of 2014, Citi entered into an agreement to sell its consumer business in Peru (for additional information, see “Executive Summary” and “Global Consumer Banking” above).

At December 31, 2014, Latin America GCB had 1,829 retail branches, with approximately 31.5 million retail banking customer accounts, $27.7 billion in retail banking loans and $45.5 billion in deposits. In addition, the business had approximately 8.8 million Citi-branded card accounts with $10.9 billion in outstanding loan balances.



In millions of dollars, except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	6,230		$	6,286		$	6,041		(1	)%	4	%
Non-interest revenue	2,974			3,030			2,701			(2	)	12
Total revenues, net of interest expense	$	9,204		$	9,316		$	8,742		(1	)%	7	%
Total operating expenses	$	5,422		$	5,392		$	5,301		1	%	2	%
Net credit losses	$	2,008		$	1,727		$	1,405		16	%	23	%
Credit reserve build (release)	151			376			254			(60	)	48
Provision (release) for unfunded lending commitments	(1		)	—			—			(100	)	—
Provision for benefits and claims	158			152			167			4		(9	)
Provisions for loan losses and for benefits and claims (LLR & PBC)	$	2,316		$	2,255		$	1,826		3	%	23	%
Income from continuing operations before taxes	$	1,466		$	1,669		$	1,615		(12	)%	3	%
Income taxes	262			332			233			(21	)	42
Income from continuing operations	$	1,204		$	1,337		$	1,382		(10	)%	(3	)%
Noncontrolling interests	7			4			(2		)	75		NM
Net income	$	1,197		$	1,333		$	1,384		(10	)%	(4	)%
Balance Sheet data (in billions of dollars)
Average assets	$	80		$	82		$	80		(2	)%	3	%
Return on average assets	1.50		%	1.65		%	1.82		%
Efficiency ratio	59			58			61
Average deposits	$	46.4		$	45.6		$	44.5		2		2
Net credit losses as a percentage of average loans	4.85		%	4.19		%	3.83		%
Revenue by business
Retail banking	$	6,000		$	6,133		$	5,841		(2	)%	5	%
Citi-branded cards	3,204			3,183			2,901			1		10
Total	$	9,204		$	9,316		$	8,742		(1	)%	7	%
Income from continuing operations by business
Retail banking	$	719		$	752		$	837		(4	)%	(10	)%
Citi-branded cards	485			585			545			(17	)	7
Total	$	1,204		$	1,337		$	1,382		(10	)%	(3	)%
Foreign currency (FX) translation impact
Total revenues-as reported	$	9,204		$	9,316		$	8,742		(1	)%	7	%
Impact of FX translation ⁽¹⁾	—			(446		)	(426		)
Total revenues-ex-FX	$	9,204		$	8,870		$	8,316		4	%	7	%
Total operating expenses-as reported	$	5,422		$	5,392		$	5,301		1	%	2	%
Impact of FX translation ⁽¹⁾	—			(232		)	(297		)
Total operating expenses-ex-FX	$	5,422		$	5,160		$	5,004		5	%	3	%
Provisions for LLR & PBC-as reported	$	2,316		$	2,255		$	1,826		3	%	23	%
Impact of FX translation ⁽¹⁾	—			(100		)	(103		)
Provisions for LLR & PBC-ex-FX	$	2,316		$	2,155		$	1,723		7	%	25	%
Net income-as reported	$	1,197		$	1,333		$	1,384		(10	)%	(4	)%
Impact of FX translation ⁽¹⁾	—			(97		)	(31		)
Net income-ex-FX	$	1,197		$	1,236		$	1,353		(3	)%	(9	)%


(1)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the fourth quarter of 2014 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. Citi believes the presentation of Latin America GCB’s results excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of certain of these metrics to the reported results, see the table above.

2014 vs. 2013

Net income decreased 3% as higher expenses and credit costs were partially offset by higher revenues.

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. Net interest revenue increased 4% due to increased volumes and stable spreads in Mexico, partially offset by the ongoing spread compression in other Latin America markets. Non-interest revenue increased 3%, primarily due to higher fees from increased volumes in retail banking and cards.

Retail banking revenues increased 3% as average loans increased 6%, investment sales increased 19% and average deposits increased 6%, partially offset by lower spreads in Brazil and Colombia. Cards revenues increased 6% 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 previously disclosed fiscal reforms enacted in 2013 in Mexico, which included, among other things, higher income and other taxes that negatively impacted consumer behavior and spending. Citi expects these trends, as well as spread compression, could continue to negatively impact revenues in Latin America GCB in 2015.

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 7%, 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 fiscal reforms in Mexico (as discussed above) as well as a $71 million charge-off in the fourth quarter of 2014 related to Citi’s homebuilder exposure in Mexico, which was offset by a related release of previously established loan loss reserves and thus neutral to the cost of credit. The continued impact of the fiscal reforms and economic slowdown in Mexico is likely to cause net credit losses in Latin America GCB to remain elevated.

Argentina/Venezuela

For additional information on Citi’s exposures in Argentina and Venezuela and the potential impact to Latin America GCB results of operations as a result of certain developments in these countries, see “Managing Global Risk—Country and Cross-Border Risk” below.

2013 vs. 2012

Net income decreased 9% as higher credit costs, higher expenses and a higher effective tax rate were partially offset by higher revenues.

Revenues increased 7%, primarily due to volume growth in retail banking and cards, partially offset by spread compression. Retail banking revenues increased 5% as average loans increased 12%, investment sales increased 13% and average deposits increased 2%. Cards revenues increased 10% as average loans increased 10% and purchase sales increased 12%, excluding the impact of Credicard’s results.

Expenses increased 3% due to increased volume-related costs, mandatory salary increases in certain countries and higher regulatory costs, partially offset by lower repositioning charges and higher repositioning savings.

Provisions increased 25%, primarily due to higher net credit losses as well as a higher loan loss reserve build. Net credit losses increased 25%, primarily in the Mexico cards and personal loan portfolios, reflecting both volume growth and portfolio seasoning. The loan loss reserve build increased 52%, primarily due to an increase in reserves in Mexico related to the top three Mexican homebuilders, with the remainder due to portfolio growth and seasoning and the impact of potential losses related to hurricanes in the region during September 2013.

ASIA GCB

Asia GCB provides traditional banking and Citi-branded card services to retail customers and small to mid-size businesses, with the largest Citi presence in Korea, Singapore, Australia, Hong Kong, Taiwan, India, Japan, Malaysia, Indonesia, Thailand and the Philippines as of December 31, 2014. As previously announced, Citi entered into an agreement in December 2014 to sell its retail banking business in Japan (for additional information, see “Executive Summary” and “Global Consumer Banking” above).

At December 31, 2014, Asia GCB had 465 retail branches, approximately 16.4 million retail banking customer accounts, $71.8 billion in retail banking loans and $77.9 billion in deposits (excluding approximately $21 billion of deposits reclassified to held-for-sale as a result of Citi’s agreement in December 2014 to sell its Japan retail banking business). In addition, the business had approximately 16.5 million Citi-branded card accounts with $18.4 billion in outstanding loan balances.



In millions of dollars, except as otherwise noted	2014			2013			2012			% Change 2014 vs. 2013		% Change 2013 vs. 2012
Net interest revenue	$	4,581		$	4,756		$	5,154		(4	)%	(8	)%
Non-interest revenue	2,965			2,868			2,774			3		3
Total revenues, net of interest expense	$	7,546		$	7,624		$	7,928		(1	)%	(4	)%
Total operating expenses	$	4,896		$	4,586		$	4,898		7	%	(6	)%
Net credit losses	$	779		$	782		$	841		—	%	(7	)%
Credit reserve build (release)	(96		)	9			(36		)	NM		NM
Provision for unfunded lending commitments	(16		)	31			—			NM		—
Provisions for loan losses	$	667		$	822		$	805		(19	)%	2	%
Income from continuing operations before taxes	$	1,983		$	2,216		$	2,225		(11	)%	—	%
Income taxes	663			735			513			(10	)	43
Income from continuing operations	$	1,320		$	1,481		$	1,712		(11	)%	(13	)%
Noncontrolling interests	—			—			—			—		—
Net income	$	1,320		$	1,481		$	1,712		(11	)%	(13	)%
Balance Sheet data (in billions of dollars)
Average assets	$	131		$	129		$	127		2	%	2	%
Return on average assets	1.01		%	1.15		%	1.35		%
Efficiency ratio	65			60			62
Average deposits	$	101.2		$	102.6		$	110.8		(1	)	(7	)
Net credit losses as a percentage of average loans	0.84		%	0.88		%	0.95		%
Revenue by business
Retail banking	$	4,609		$	4,564		$	4,766		1	%	(4	)%
Citi-branded cards	2,937			3,060			3,162			(4	)	(3	)
Total	$	7,546		$	7,624		$	7,928		(1	)%	(4	)%
Income from continuing operations by business
Retail banking	$	738		$	786		$	930		(6	)%	(15	)%
Citi-branded cards	582			695			782			(16	)	(11	)
Total	$	1,320		$	1,481		$	1,712		(11	)%	(13	)%