Description
Underlying business remains strong, and revenues have
been stable
Expenses expected to be down 20% from peak levels
Headcount expected to be down 20% in the near-term
from peak levels
Significant reduction in risky assets
Very strong capital position
Strong competitive position to seize future opportunities
Town Hall Meeting
November 17, 2008
1
Going into 2009 Stronger than 2008
Underlying business remains strong, and revenues have
been stable
Expenses expected to be down 20% from peak levels
Headcount expected to be down 20% in the near-term
from peak levels
Significant reduction in risky assets
Very strong capital position
Strong competitive position to seize future opportunities
2
Deposit
Gathering
Wholesale
Leverage
Asset
Investment
Value-added
services
Payments
Services
Global Universal Bank Is The Right Model
Universal Bank Strategy Remains Unchanged
3
Benefits of the Global Universal Bank Model
Securities & Banking
Cards
Consumer Banking, GTS,
GWM, Other
GTS
Wealth
Management
Consumer
Deposits
Total Assets
$2,050B
$1,090
$118
$842
Asset Intensive Deposit Sources Total Deposits
$780B
$273
$124
$287
4
YTD 3Q’08, about 50% of Citi’s adjusted revenues have come from
outside the U.S.
(1)
Key Differentiator
Unparalleled International Business
Deposit growth 4-6% 14% 10%+
Cards growth 3-5% 24% 15%+
Loan growth (ex-Cards) 4-6% 8% 6%+
Net Credit Margin (YTD ’08):
Cards 6.5% 15.7%
Other consumer loans ~3.75% ~12.0%
2008-2009 Projected GDP growth
(4)
(1)-1% 4-6%
U.S Historical Industry Citi Non-U.S.
(2)
% Long-term growth trends Growth Rate
(3)
Reported Ex-Acq.
(1) Excluding S&B revenue marks, press release disclosed items and Corporate Other.
(2) International growth reflects 2002-2008 period.
(3) Based on Federal Reserve data.
(4) Based on Citi economist forecasts; non U.S. GDP forecasts are for emerging markets (including China, India, Korea, Poland, Russia,
South Africa, Turkey, Brazil & Mexico).
5
World Class Leadership Team
Chairman / Vice Chairman / Directors
CEO Global Wealth Management Michael Corbat
Vice Chairman
Director and Senior Counselor
Vice Chairman
Chairman
Head of O&T Marty Lippert
CEO N. America Cards George Awad
Chief Talent Officer Paul McKinnon
Additional New Business Heads
Sir Win Bischoff
CEO of CEE (Central & Eastern Europe)
CEO of EMEA
N. America Mortgage
CEO
Chairman & CEO LatAm & Mexico
Chief Risk Officer
Head Global Banking and CAI, ICG
CEO ICG
CEO Global Cards
Head Global Capital Markets / Markets & Banking, ICG
CEO Consumer Banking NA / Global Head, Consumer Strategy
CFO
CAO
CEO Asia Pacific
Shirish Apte
Bill Mills
Sanjiv Das
Stephen Volk
Robert Rubin
Lewis B. Kaden
Vikram Pandit
Manuel Medina-Mora
Brian Leach
Ned Kelly
John Havens
Steven J. Freiberg
James A. Forese
Terri Dial
Gary Crittenden
Don Callahan
Ajay Banga
Executive Committee Members
Note: BLUE indicates new to job; RED indicates new to Citi
6
Sharp Reduction In Assets
Assets ($Tr)
1.88
2.02
2.22
2.36
2.19 2.20
2.10
2.05
4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
25%
$474B
(13)%
$(308)B
Down Over 20%
Total Assets Legacy Assets
Reduced legacy assets by over 20% since 1Q’08
Note: For details on legacy assets please refer to the Citi Investor & Analyst Day presentation from May 9, 2008.
7
Asset Divestitures and Capital Released
Completed:
CitiCapital (1.0) 8
CitiStreet (0.2) 2
Redecard
(1)
(0.4) 3
Upromise (0.1) 1
All Other (0.3) 2
Tier 1 Capital Impact to Tier 1
Divestiture Released ($B) Ratio (bps)
(1) Reflects the sale of ~15% stake in Redecard.
Note: 3Q’08 proforma impact on Tier 1 calculated excluding TARP additional capital. Totals may not sum due to rounding.
Pending:
3Q’08 proforma Retail Bank Germany (7.0) 60
3Q’08 proforma Citi Global Services (0.3) 2
$9.4 billion of Tier 1 capital from divestitures
8
Strengthened Capital Base
Capital Ratios
Added ~$75 Billion in New Capital ($B) since 3Q’07
(1) Proforma for the $25 billion of additional TARP capital. Assumes $1.3 billion of TARP is common equity (warrants) and $23.7 billion preferred (25% of preferred
qualifies for TCE as per Moody’s guidance).
~$50
7.3%
7.1%
7.7%
8.7%
8.2%
5.9%
5.7%
6.2%
6.9%
6.8%
10.4%
7.4%
3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
Tier 1
TCE/RWMA
Raised through
public and private
offerings
$25 ~$75
TARP
Proforma
for TARP
(1)
9
Strong Tier 1 Capital
8.2%
8.9%
7.9%
7.5%
2.1%
2.0%
2.3%
~1.9%
Citi JPM+WAMU BAC+MER WFC+WB
Ti er 1 Capi tal Rati o TARP
10.4%
10.8%
~9.8%
(1)
9.8%
(2)
Proforma 3Q’08
(1) Based on information contained in BAC’s 10/31/08 Merger Proxy.
(2) Proforma as of 12/31/08 based on information contained in WFC’s 10/3/08 8-K.
Note: Pro-forma Tier 1 ratios based on company public filings / management presentations. Proforma TARP impact on tier 1 ratio based on the
following capital injections: $25B for J PM, $25B for Citi, $25B for BAC+MER and $25B for WFC+WB (assumed to replace short-term debt).
Totals may not sum due to rounding.
(1)
(2)
10
9.5
10.4
12.7
16.1
18.3
20.8
24.0
1.37%
1.40%
1.64%
2.07%
2.31%
2.78%
3.35%
1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
Almost Doubled Reserves in One Year
Loan Loss Reserve Ratio
Allowance for Loan Losses ($B)
11
Capital Ratios and Allowance for Loan Losses
1.52% 2.16% 2.50% 3.35%
Allowance for Loan
Losses as a % of Loans
2.8% 3.4% 6.8% 3.7%
TCE
(2)
/ Risk
Weighted Assets
WFC +
WB
(1)
BAC
JPM+
WAMU
Citi
Peer comparison as of 3Q’08
(1) As of 9/30/08 based on information contained in WFC’s 10/30/08 proforma 8-K.
(2) Tangible common equity (TCE) is not based on the Moody’s calculation. It is defined for the purpose of this slide as total equity minus preferred stock
minus goodwill minus intangible assets plus mortgage servicing rights (MSR).
Note: Based on company filings.
12
57%
52%
38%
43%
33%
27%
22%
21%
21%
13%
19%
11%
18%
10%
12%
7%
5%
5%
6%
6%
8%
3%
3%
2%
WFC + WB HSBC Citi JPM +
WAMU
BAC + MER UBS CS DB
Notes:
• Data as of 3Q’08 except for HSBC, which reports semi-annually; BAC/MER based on information contained in BAC’s 3Q’08 report and adjusted for additional MER balance sheet
impact as determined by merger proxy filed October 31, 2008; 3Q’08 WFC/WB based on information contained in WFC’s 8-K filed on October 30, 2008.
• HSBC, DB, and UBS under IFRS accounting. Structural liquidity/RWA not comparable for European banks as they are based on Basel II standard.
• Short-term debt includes commercial paper and other short term borrowings as reported. HSBC amount equal to short positions in debt securities and equity
shares, and UBS amount equal to money market paper issuance.
Long-Term
Debt
Deposits
Equity
Powerful Liquidity Position
Deposits + LT Debt + Equity as a % of Risk Weighted Assets
103% NA 111% 107% 118% NA NA NA
63%
83%
70%
60% 60%
40%
37%
30%
Structural Liquidity: Deposits + LT Debt + Equity as a % of Total Assets
Cash box: $51B, up
113% since 3Q’07
13
Stable Business Revenues
(1) Revenues exclude Securities & Banking marks and Press Release Disclosed Items. Total revenues include Corporate/Other.
Note: For a reconciliation to GAAP revenues please see page 24.
Reported
GAAP Revs $23.0 $24.6 $25.8 $21.6 $6.4 $12.4 $18.1 $16.7
GWM
Global
Cards
GTS
Consumer
Banking
Adjusted Managed Revenues ($B)
(1)
$1.6 $1.7 $1.8
$2.1 $2.3 $2.3 $2.4 $2.5
$2.7
$2.8
$3.2
$3.5
$3.5 $3.3 $3.3 $3.1
$7.1 $7.0
$7.3
$7.3
$7.7
$7.8 $7.4 $7.4
$5.3
$4.9
$5.3
$5.6
$5.7
$5.3
$5.3
$3.8
$7.0 $7.6
$8.4
$5.5 $3.9
$5.4
$7.7
$4.6
$2.0
$3.6
$1.6
$1.2
$1.1
$1.0
$0.9
$0.8
4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
Securities &
Banking
$24.3
$24.9
$26.8
$25.0
$23.8
$25.6
$27.1
$25.0
Net Impact of
Card Securit.
14
Stable Business Revenues
Adjusted Revenues ($B)
(1)
97.2
101.0
93.1
101.5
(1) Revenues exclude Securities & Banking marks and Press Release Disclosed Items. Total revenues include Corporate/Other.
Note: LTM – last twelve months. For a reconciliation to GAAP revenues please see page 24.
LTM 3Q’07 LTM 3Q’08 LTM 3Q’07 LTM 3Q’08
Adjusted GAAP Revenues Adjusted Managed Revenues
15
Headcount (M)
20% Targeted Reduction vs. Peak Levels
(1) Excludes the impact from the 1Q’07 $1.38B pre-tax charge related to a structural expense review.
Note: Historical numbers have been restated to exclude discontinued operations.
(1)
(1)
Y-o-Y Growth
Expenses ($B)
Y-o-Y Growth
2009
Expense
Target:
$50-52B
11.5
13.5
15.1
14.4 14.2
16.1 15.8 15.6
14.4
4%
23%
6%
17%
23%
19%
15%
8%
2%
3Q' 06 4Q' 06 1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
320 327
343
361 371 375 369 363
352
10%
9%
12%
15% 16% 15%
8%
1%
(5)%
3Q' 06 4Q' 06 1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
Near-Term
Headcount
Target:
~300,000
16
Getting Fit – Fast!
Operating Results ($B)
LTM 3Q’07 LTM 3Q’08 %
Adjusted Managed Revenues $101.0 $101.5 0%
LTM 3Q’08 ’09 Target
Expenses 62 50-52 ~16-19%
Balance Sheet
3Q’07 3Q’08
Tier 1 Capital Ratio 7.3% 10.4% 310 bps
Allowance for Loan Losses ($B) $12.7 $24.0 89%
Assets ($Tr) 2.4 2.1 13%
Legacy Assets ($B) NA 20%
Structural Liquidity 55% 63% 800 bps
(1) Proforma for $25 billion TARP capital.
Note: LTM – last twelve months. For a reconciliation of adjusted managed revenues to GAAP revenues please see page 24.
Peak (4Q’07) Target %
Headcount (M) 375
Underlying business remains strong, and revenues have
been stable
Expenses expected to be down 20% from peak levels
Headcount expected to be down 20% in the near-term
from peak levels
Significant reduction in risky assets
Very strong capital position
Strong competitive position to seize future opportunities
Town Hall Meeting
November 17, 2008
1
Going into 2009 Stronger than 2008
Underlying business remains strong, and revenues have
been stable
Expenses expected to be down 20% from peak levels
Headcount expected to be down 20% in the near-term
from peak levels
Significant reduction in risky assets
Very strong capital position
Strong competitive position to seize future opportunities
2
Deposit
Gathering
Wholesale
Leverage
Asset
Investment
Value-added
services
Payments
Services
Global Universal Bank Is The Right Model
Universal Bank Strategy Remains Unchanged
3
Benefits of the Global Universal Bank Model
Securities & Banking
Cards
Consumer Banking, GTS,
GWM, Other
GTS
Wealth
Management
Consumer
Deposits
Total Assets
$2,050B
$1,090
$118
$842
Asset Intensive Deposit Sources Total Deposits
$780B
$273
$124
$287
4
YTD 3Q’08, about 50% of Citi’s adjusted revenues have come from
outside the U.S.
(1)
Key Differentiator
Unparalleled International Business
Deposit growth 4-6% 14% 10%+
Cards growth 3-5% 24% 15%+
Loan growth (ex-Cards) 4-6% 8% 6%+
Net Credit Margin (YTD ’08):
Cards 6.5% 15.7%
Other consumer loans ~3.75% ~12.0%
2008-2009 Projected GDP growth
(4)
(1)-1% 4-6%
U.S Historical Industry Citi Non-U.S.
(2)
% Long-term growth trends Growth Rate
(3)
Reported Ex-Acq.
(1) Excluding S&B revenue marks, press release disclosed items and Corporate Other.
(2) International growth reflects 2002-2008 period.
(3) Based on Federal Reserve data.
(4) Based on Citi economist forecasts; non U.S. GDP forecasts are for emerging markets (including China, India, Korea, Poland, Russia,
South Africa, Turkey, Brazil & Mexico).
5
World Class Leadership Team
Chairman / Vice Chairman / Directors
CEO Global Wealth Management Michael Corbat
Vice Chairman
Director and Senior Counselor
Vice Chairman
Chairman
Head of O&T Marty Lippert
CEO N. America Cards George Awad
Chief Talent Officer Paul McKinnon
Additional New Business Heads
Sir Win Bischoff
CEO of CEE (Central & Eastern Europe)
CEO of EMEA
N. America Mortgage
CEO
Chairman & CEO LatAm & Mexico
Chief Risk Officer
Head Global Banking and CAI, ICG
CEO ICG
CEO Global Cards
Head Global Capital Markets / Markets & Banking, ICG
CEO Consumer Banking NA / Global Head, Consumer Strategy
CFO
CAO
CEO Asia Pacific
Shirish Apte
Bill Mills
Sanjiv Das
Stephen Volk
Robert Rubin
Lewis B. Kaden
Vikram Pandit
Manuel Medina-Mora
Brian Leach
Ned Kelly
John Havens
Steven J. Freiberg
James A. Forese
Terri Dial
Gary Crittenden
Don Callahan
Ajay Banga
Executive Committee Members
Note: BLUE indicates new to job; RED indicates new to Citi
6
Sharp Reduction In Assets
Assets ($Tr)
1.88
2.02
2.22
2.36
2.19 2.20
2.10
2.05
4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
25%
$474B
(13)%
$(308)B
Down Over 20%
Total Assets Legacy Assets
Reduced legacy assets by over 20% since 1Q’08
Note: For details on legacy assets please refer to the Citi Investor & Analyst Day presentation from May 9, 2008.
7
Asset Divestitures and Capital Released
Completed:
CitiCapital (1.0) 8
CitiStreet (0.2) 2
Redecard
(1)
(0.4) 3
Upromise (0.1) 1
All Other (0.3) 2
Tier 1 Capital Impact to Tier 1
Divestiture Released ($B) Ratio (bps)
(1) Reflects the sale of ~15% stake in Redecard.
Note: 3Q’08 proforma impact on Tier 1 calculated excluding TARP additional capital. Totals may not sum due to rounding.
Pending:
3Q’08 proforma Retail Bank Germany (7.0) 60
3Q’08 proforma Citi Global Services (0.3) 2
$9.4 billion of Tier 1 capital from divestitures
8
Strengthened Capital Base
Capital Ratios
Added ~$75 Billion in New Capital ($B) since 3Q’07
(1) Proforma for the $25 billion of additional TARP capital. Assumes $1.3 billion of TARP is common equity (warrants) and $23.7 billion preferred (25% of preferred
qualifies for TCE as per Moody’s guidance).
~$50
7.3%
7.1%
7.7%
8.7%
8.2%
5.9%
5.7%
6.2%
6.9%
6.8%
10.4%
7.4%
3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
Tier 1
TCE/RWMA
Raised through
public and private
offerings
$25 ~$75
TARP
Proforma
for TARP
(1)
9
Strong Tier 1 Capital
8.2%
8.9%
7.9%
7.5%
2.1%
2.0%
2.3%
~1.9%
Citi JPM+WAMU BAC+MER WFC+WB
Ti er 1 Capi tal Rati o TARP
10.4%
10.8%
~9.8%
(1)
9.8%
(2)
Proforma 3Q’08
(1) Based on information contained in BAC’s 10/31/08 Merger Proxy.
(2) Proforma as of 12/31/08 based on information contained in WFC’s 10/3/08 8-K.
Note: Pro-forma Tier 1 ratios based on company public filings / management presentations. Proforma TARP impact on tier 1 ratio based on the
following capital injections: $25B for J PM, $25B for Citi, $25B for BAC+MER and $25B for WFC+WB (assumed to replace short-term debt).
Totals may not sum due to rounding.
(1)
(2)
10
9.5
10.4
12.7
16.1
18.3
20.8
24.0
1.37%
1.40%
1.64%
2.07%
2.31%
2.78%
3.35%
1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
Almost Doubled Reserves in One Year
Loan Loss Reserve Ratio
Allowance for Loan Losses ($B)
11
Capital Ratios and Allowance for Loan Losses
1.52% 2.16% 2.50% 3.35%
Allowance for Loan
Losses as a % of Loans
2.8% 3.4% 6.8% 3.7%
TCE
(2)
/ Risk
Weighted Assets
WFC +
WB
(1)
BAC
JPM+
WAMU
Citi
Peer comparison as of 3Q’08
(1) As of 9/30/08 based on information contained in WFC’s 10/30/08 proforma 8-K.
(2) Tangible common equity (TCE) is not based on the Moody’s calculation. It is defined for the purpose of this slide as total equity minus preferred stock
minus goodwill minus intangible assets plus mortgage servicing rights (MSR).
Note: Based on company filings.
12
57%
52%
38%
43%
33%
27%
22%
21%
21%
13%
19%
11%
18%
10%
12%
7%
5%
5%
6%
6%
8%
3%
3%
2%
WFC + WB HSBC Citi JPM +
WAMU
BAC + MER UBS CS DB
Notes:
• Data as of 3Q’08 except for HSBC, which reports semi-annually; BAC/MER based on information contained in BAC’s 3Q’08 report and adjusted for additional MER balance sheet
impact as determined by merger proxy filed October 31, 2008; 3Q’08 WFC/WB based on information contained in WFC’s 8-K filed on October 30, 2008.
• HSBC, DB, and UBS under IFRS accounting. Structural liquidity/RWA not comparable for European banks as they are based on Basel II standard.
• Short-term debt includes commercial paper and other short term borrowings as reported. HSBC amount equal to short positions in debt securities and equity
shares, and UBS amount equal to money market paper issuance.
Long-Term
Debt
Deposits
Equity
Powerful Liquidity Position
Deposits + LT Debt + Equity as a % of Risk Weighted Assets
103% NA 111% 107% 118% NA NA NA
63%
83%
70%
60% 60%
40%
37%
30%
Structural Liquidity: Deposits + LT Debt + Equity as a % of Total Assets
Cash box: $51B, up
113% since 3Q’07
13
Stable Business Revenues
(1) Revenues exclude Securities & Banking marks and Press Release Disclosed Items. Total revenues include Corporate/Other.
Note: For a reconciliation to GAAP revenues please see page 24.
Reported
GAAP Revs $23.0 $24.6 $25.8 $21.6 $6.4 $12.4 $18.1 $16.7
GWM
Global
Cards
GTS
Consumer
Banking
Adjusted Managed Revenues ($B)
(1)
$1.6 $1.7 $1.8
$2.1 $2.3 $2.3 $2.4 $2.5
$2.7
$2.8
$3.2
$3.5
$3.5 $3.3 $3.3 $3.1
$7.1 $7.0
$7.3
$7.3
$7.7
$7.8 $7.4 $7.4
$5.3
$4.9
$5.3
$5.6
$5.7
$5.3
$5.3
$3.8
$7.0 $7.6
$8.4
$5.5 $3.9
$5.4
$7.7
$4.6
$2.0
$3.6
$1.6
$1.2
$1.1
$1.0
$0.9
$0.8
4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08
Securities &
Banking
$24.3
$24.9
$26.8
$25.0
$23.8
$25.6
$27.1
$25.0
Net Impact of
Card Securit.
14
Stable Business Revenues
Adjusted Revenues ($B)
(1)
97.2
101.0
93.1
101.5
(1) Revenues exclude Securities & Banking marks and Press Release Disclosed Items. Total revenues include Corporate/Other.
Note: LTM – last twelve months. For a reconciliation to GAAP revenues please see page 24.
LTM 3Q’07 LTM 3Q’08 LTM 3Q’07 LTM 3Q’08
Adjusted GAAP Revenues Adjusted Managed Revenues
15
Headcount (M)
20% Targeted Reduction vs. Peak Levels
(1) Excludes the impact from the 1Q’07 $1.38B pre-tax charge related to a structural expense review.
Note: Historical numbers have been restated to exclude discontinued operations.
(1)
(1)
Y-o-Y Growth
Expenses ($B)
Y-o-Y Growth
2009
Expense
Target:
$50-52B
11.5
13.5
15.1
14.4 14.2
16.1 15.8 15.6
14.4
4%
23%
6%
17%
23%
19%
15%
8%
2%
3Q' 06 4Q' 06 1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
320 327
343
361 371 375 369 363
352
10%
9%
12%
15% 16% 15%
8%
1%
(5)%
3Q' 06 4Q' 06 1Q' 07 2Q' 07 3Q' 07 4Q' 07 1Q' 08 2Q' 08 3Q' 08
Near-Term
Headcount
Target:
~300,000
16
Getting Fit – Fast!
Operating Results ($B)
LTM 3Q’07 LTM 3Q’08 %
Adjusted Managed Revenues $101.0 $101.5 0%
LTM 3Q’08 ’09 Target
Expenses 62 50-52 ~16-19%
Balance Sheet
3Q’07 3Q’08
Tier 1 Capital Ratio 7.3% 10.4% 310 bps
Allowance for Loan Losses ($B) $12.7 $24.0 89%
Assets ($Tr) 2.4 2.1 13%
Legacy Assets ($B) NA 20%
Structural Liquidity 55% 63% 800 bps
(1) Proforma for $25 billion TARP capital.
Note: LTM – last twelve months. For a reconciliation of adjusted managed revenues to GAAP revenues please see page 24.
Peak (4Q’07) Target %
Headcount (M) 375