Fixed Income Investor Review John Gerspach Chief Financial Officer Chief Financial Officer Eric Aboaf Treasurer Treasurer J 21 2010 January 21, 2010
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Fixed Income Investor Review
John GerspachChief Financial OfficerChief Financial Officer
Eric AboafTreasurerTreasurer
J 21 2010January 21, 2010
Citigroup – 2009 Summary
Substantial progress in 2009– Built financial strength
Substantial progress in 2009– Built financial strengthBuilt financial strength– Reduced our size and scope– Clear strategy built around Citi’s distinctiveness– Created Citi Holdings and reduced non-core assets
Built financial strength– Reduced our size and scope– Clear strategy built around Citi’s distinctiveness– Created Citi Holdings and reduced non-core assets– Created Citi Holdings and reduced non-core assets– Completed overhaul of risk management– Restructured businesses and added strong leadership
Repaid TARP
Created Citi Holdings and reduced non core assets– Completed overhaul of risk management– Restructured businesses and added strong leadership – Repaid TARP– Repaid TARP– Strong operating businesses in Citicorp
We enter 2010 with a solid foundation
– Repaid TARP– Strong operating businesses in Citicorp
We enter 2010 with a solid foundation
Some signs of credit stabilizationSome signs of credit stabilization
1
Citigroup – Major P&L Items in 4Q’09
Pre-tax
Loss from USG TruPs repayment (1) $(7,988) Corp/Other
Pre tax ($MM) Impact Segment
Exiting of loss-sharing agreement with USG (2) (2,064) Corp/Other
Citigroup Credit Value Adjustment (3) (1,789) S&B; SAP
(1) Loss from the repayment of trust preferred securities held by the U.S. government ($4.9B after-tax).(2) Impact from the termination of the loss-sharing agreement with the government ($1.3B after-tax). It arises from the removal of the
loss-sharing asset of ~$3.2B and the cancellation of ~$1.1B carrying value of trust preferred securities ($1.8B notional amount).(3) Credit value adjustment (CVA) on Citi Liabilities at Fair Value Option (FVO) and derivatives of $949 million due to tightening in Citi’s
credit spreads in the fourth quarter and a $840 million adjustment to the FVO CVA balance, reflecting correction of prior periods. Please see slide 36 of Citigroup’s 4Q’09 quarterly earnings presentation for Citi’s CVA in 3Q and 4Q of 2009.
2
Citigroup – Summary Income Statement($B, Except EPS) 4Q'09 3Q'09 4Q'08 % QoQ % YoY
Net Interest Revenue $11,161 $11,998 $13,271 (7)% (16)%Non Interest Revenue (5,756) 8,392 (7,625) NM 25%Non Interest Revenue (5,756) 8,392 (7,625) NM 25%
Net Revenues 5,405 20,390 5,646 (73)% (4)%
Operating Expenses 12,314 11,824 24,642 4% (50)%
Net Credit Losses 7,135 7,969 6,143 (10)% 16%Net Credit Losses 7,135 7,969 6,143 (10)% 16%Net LLR Build (1) 755 802 5,958 (6)% (87)%PB&C 294 324 594 (9)% (51)%
Credit Losses, Claims and Benefits 8,184 9,095 12,695 (10)% (36)%
I TIncome Taxes (7,353) (1,122) (10,698) NM 31%
Income from Cont. Ops. (7,740) 593 (20,993) NM 63%
Net Income $(7,579) $101 $(17,263) NM 56%
Net Income Available to Common (7,766) (3,242) (17,891) NM 57%
Diluted EPS from Cont. Ops. (2, 3) $(0.34) $(0.23) $(4.04) (48)% 92%Diluted EPS (2, 3) $(0.33) $(0.27) $(3.40) (22)% 90%
(1) Includes provision for unfunded lending commitments.(2) 3Q’09 Includes $(2.2)B impact to common shareholders from the completion of all stages of the exchange offers, net of $851MM gain flowing through net income. (3) Diluted shares used in the diluted EPS calculation represent basic shares due to the negative income available to common shareholders. Using actual diluted shares would result in anti-dilution. Note: Totals may not sum due to rounding. 3
Citigroup – Organization & Strategy
Focus around core historical strengths and clients’ needs
Shift away from businesses overly reliant on wholesale funding to more stable and
Focus around core historical strengths and clients’ needs
Shift away from businesses overly reliant on wholesale funding to more stable and fit bl b iprofitable businesses
Positioned against growing segments of financial services
profitable businessesPositioned against growing segments of financial services
Global bank for businesses and consumersGlobal bank for businesses and consumers Non-core businessesNon-core businesses
CiticorpCiticorp Citi HoldingsCiti Holdings
Global bank for businesses and consumers
Unmatched global network and emerging markets footprint
Deep and diversified business portfolio across
Unmatched global network and emerging markets footprint
Deep and diversified business portfolio across
Non core businesses and assets
Includes many attractive franchises
and assets
Includes many attractive franchises
Deep and diversified business portfolio across consumer, services, and institutional revenue poolsDeep and diversified business portfolio across consumer, services, and institutional revenue pools Focus on reducing
assets, managing risks and optimizing value
Focus on reducing assets, managing risks and optimizing value
No legal separation between Citicorp and Citi HoldingsNo legal separation between Citicorp and Citi Holdings
4
Citigroup – Assets(EOP $Tr)
2.201.942.052.10
1.82 1.85 1.89 1.86
(1)
(1) Preliminary. Note: Totals may not sum due to rounding. 5
Citigroup – Provisions (1)
($B)
(2)
C t12.712.7
10.3
Corporate
1.53.5
0.8
5 97.1
9.1 9.1
Consumer
8.2
5.97.7
9.27.4
(1) Provisions for Credit Losses and for Benefits and Claims.(2) Loan Loss Reserves include provision for unfunded lending commitments and credit reserve builds/releases. Note: Totals may not sum due to rounding. 6
Citigroup – Consumer Credit Trends
Months of Coverage (1)
(1) Months of coverage: current reserve balance / (current period net credit losses / 3). Note: The 2009 fourth quarter includes a reduction of approximately $335 million related to securitizations and approximately $400 million related to the sale or
transfers to held-for-sale of U.S. Real Estate Lending Loans. NCLs as a % of average loans; Loan Loss Reserves as a % of EOP loans.
12.3 12.6 12.5 13.1 12.6 12.7 13.3 14.1
7
N.A. Cards & Mortgages – Consumer Credit Trends($B)
90+ DPD NCLs
N.A. Cards Citicorp N.A. Cards Citi Holdings($B)
$2 29 $2 18
90+ DPD NCLs
$1.38 $1.42 $1.51$1.81
$1 15 $1 23 $1.39$1.69
$2.14
$1.97
$2.15$2.09 $2.08
$2.06 $1.95
$1.56 $1.61 $1.73
$2.13$2.29
$2.10 $2.18
$1.19 $1.29$1.46
$1.62
$2.13$1.96
$2.15
$2.00 $1.96
A M d 3Q’09 4Q’09 A M d 3Q’09 4Q’09$1.00 $1.15 $1.23
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
$
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
Avg. Mgd. 3Q’09 4Q’09Loans (1) $81.2B $81.7BAvg. Mgd. 3Q’09 4Q’09Loans (1) $81.2B $81.7B
Avg. Mgd. 3Q’09 4Q’09Loans (1) $59.8B $58.2BAvg. Mgd. 3Q’09 4Q’09Loans (1) $59.8B $58.2B
$11 94
90+ DPD NCLs
1st Mortgages 2nd Mortgages
90+ DPD NCLs Avg. 3Q’09 4Q’09Loans $58.3B $56.0BAvg. 3Q’09 4Q’09Loans $58.3B $56.0B
Avg. 3Q’09 4Q’09Loans $125.3B $121.3BAvg. 3Q’09 4Q’09Loans $125.3B $121.3B
$6.47$5.26
$4.20$3.48
$8.09 $8.57$10.57
$11.94
$0 87$0 75$0 49$0 36 $1 00 $1.27 $1 10 $1 07
$1.06 $1.18$1.35
$1.58
$0.93$1.16 $1.13 $0.99
$1.92 $1.92$1.72 $1.60
$0 80$0.87$0.75$0.49$0.36 $1.00 $ $1.10 $1.07
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
$0.80$0.66$0.60$0.52
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
(1) Managed metrics are non-GAAP financial measures. For additional information on these metrics, please see pages 38 and 39 of Citigroup’s 4Q’09 quarterly financial data supplement. 8
Citigroup – Int’l Consumer Credit Trends($B)
90+ DPD NCLs
$0 65
90+ DPD NCLs
Citicorp – Asia Consumer Banking Citicorp – Latin America Consumer Banking($B)
Avg. 3Q’09 4Q’09Loans $64.3B $67.2BAvg. 3Q’09 4Q’09Loans $64.3B $67.2B
Avg. 3Q’09 4Q’09Loans $28.8B $30.1BAvg. 3Q’09 4Q’09Loans $28.8B $30.1B
$0.87 $0.94 $0.93$0.81
$0 56 $0.64$0 54 $0 54 $0.61 $0.66 $0.63
$0.94$0.92$1.06
$0.83$0.48 $0.51 $0.47 $0.48
$0.21 $0.24 $0.26 $0.26 $0.27$0.35 $0.35 $0.31
$0.57$0.65
$0.59$0.51
$0.47$0.56 $0.54 $0.54 $
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q091Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
$0 15$0.16
90+ DPD NCLs
$1 54 $1 45
90+ DPD NCLs
Citicorp – EMEA Consumer Banking Holdings – International LCL
Avg. 3Q’09 4Q’09Loans $39.5B $36.3BAvg. 3Q’09 4Q’09Loans $39.5B $36.3B
Avg. 3Q’09 4Q’09Loans $8.7B $8.5BAvg. 3Q’09 4Q’09Loans $8.7B $8.5B
$0.05$0.07 $0.07
$0 05 $0 05 $0.06$0.09
$0.12$0.14 $0.14$0.08
$0.14$0.15$0 6
$0.11
$0.09
$0.89 $0.99 $1.03 $1.15
$0.66 $0.70 $0.74 $0.74 $0.83$0.98 $0.97
$0.80
$1.36$1.54 $1.45 $1.35
$0.05 $0.05 $0.06
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
9
Citi Holdings Asset ReductionsEOP A t ($B)
898
EOP Assets ($B)
Brokerage & Asset Management $35 6%
4Q’09 % Total
898
833775
715662 649
• Morgan Stanley Smith Barney JV 26 5• Retail Alt. Inv. / Latam Asset Mgmt. 9 2
Local Consumer Lending $358 65%• North America 317 58
(39)%
662 649617
547
– Mortgages 185 34– Student 31 6– Cards (Retail Partners) 38 7– Personal & Other 25 5– Auto 14 3
Commercial Real Estate 11 2– Commercial Real Estate 11 2– Other(1) 13 2
• EMEA 29 5• Asia 12 2
Special Asset Pool $154 28%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
Special Asset Pool $154 28%• Securities at AFS/HTM 48 9• Loans, Leases & LCs 33 6• Mark-to-Market 31 6• Other 42 8
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09Total $547 100%
(1) Includes Primerica. Note: Totals may not sum due to rounding. 10
Citigroup – Liabilities(EOP $T )
Short Term BorrowingsFed Funds Purchased & Securities Loaned or Sold Under Agreement to RepurchaseTrading Account LiabilitiesOther Liabilities (1)Deposits
(EOP $Tr)
0.28 0 25
0.140.11 0.10
0 13
2.202.10 2.05
1.941.82 1.85 1.89 1.86
pLong Term DebtTotal Equity
(16)%
0.19 0.19 0.22 0.16 0.15 0.15 0.16 0.14
0.20 0.19 0.170.17 0.13 0.12 0.13 0.14
0.28 0.25 0.250.21
0.18 0.170.18 0.15
0.130.12 0.10 0.06 0.07
0.83 0.80 0.78 0.77 0.76 0.80 0.83 0.84
0.13 0.14 0.13 0.14 0.15 0.15 0.14 0.15
0.42 0.42 0.39 0.36 0.34 0.35 0.38 0.36
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
(1) Other Liabilities include Brokerage Payables, Liabilities related to discontinued operations held for sale, and Other Liabilities. (2) Preliminary.Note: Totals may not sum due to rounding.
(2)
11
Citigroup – Deposits
(EOP $B)
(1)
831774780804 763
805 833 836
(2)
(1) Deposits as a percentage of net loans.(2) Preliminary.(3) Deposits excluding FX figures show non-USD deposits expressed at December 31, 2009 FX rates.
Total Deposits excl. FX (3)
$791 $759 $780 $791 $792 $815 $834 $836
12
Citigroup – 2009 Long-Term Non-TLGP Debt Issuance Summary
2009 Issuance by Currency2009 Issuance by Tenor (1)
($B) $25.9B 2009 Total
$3.3 USD$0.8 Non-USD
4%2%3%
$10.7 USD$4.5 Non-USD$3.0 USD
$3.6 Non-USD25%
66%
5YR 10YR 30YR USD Euro Sterling Yen Other
(1) USD & Non-USD amounts show all non-TLGP senior debt issued by Citigroup Inc. and Citigroup Funding Inc.Note: Totals may not sum due to rounding. 13
Citigroup – Maturities & Issuance (1) of Long-Term Debt
$85($B)
$36 $39$31
$47 $54$6
$59
~$15$41
$26
FY 2008 FY 2009 FY 2010
Maturities Non-TLGP Issuance TLGP Issuance
Modest long-term debt re-issuance needs
Announced tender offer to retire generally older vintage debt nearing maturity
Modest long-term debt re-issuance needs
Announced tender offer to retire generally older vintage debt nearing maturity
(1) Maturities and Issuance include senior debt and TLGP in Citigroup Inc., Citigroup Funding Inc. (CFI), and Citigroup Global Markets Holdings Inc. (CGMHI); and TLGP in Citibank, N.A. Aggregate annual maturities of long-term debt as disclosed in Citigroup Inc.’s Form 10-K for 2008 are $88.5B for 2009 and $41.4B in 2010 (based on issuances in 2009, current estimate of 2010 maturities is $47B), which include FHLB & local country debt, not included in this chart.
Note: Totals may not sum due to rounding. 14
Citigroup – Structural Liquidity LevelStructural Liquidity as a % of Total AssetsStructural Liquidity as a % of Total Assets
($B)Stockholders' Equity Long-Term Debt Deposits
63% 65% 64% 66% 68% 71% 72% 73%
20% 19% 19% 19% 20% 20%
38% 38% 38% 40% 42% 44% 44% 45%
x6% 7% 6% 7% 8% 8% 8% 8%
19% 20% 19% 19% 19% 19% 20% 20%
Q108 Q208 Q308 4Q08 1Q09 2Q09 3Q09 4Q09
Deposits $831 $804 $780 $774 $763 $805 $833 $836LTD $425 $418 $393 $360 $337 $348 $380 $365
Equity $132 $141 $130 $144 $146 $154 $143 $155
Structural $1,388 $1,362 $1,303 $1,278 $1,246 $1,307 $1,355 $1,355
Note: Totals may not sum due to rounding.
Liquidity $1,388 $1,362 $1,303 $1,278 $1,246 $1,307 $1,355 $1,355
15
Citigroup – Key Capital Metrics
16.6% 16.6%
Total CapitalTier 1Tangible Common Equity (TCE)Tier 1 Common (1)
(1)
11.2%12.3% 11.7%
15.7% 15.6% 15.3%
11.9% 11.9% 12.7%11.7%
12.8%
10.3%10 9%
7.7%8.7% 8.2%
4.4% 3.9%3.1% 3.0%
4.0%
9.6%
4.2%
10.9%
9.1%
4.1% 4.3% 3.7%2.7%2.3% 2.2%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09(2)
Tier 1 $99.1 $106.9 $96.3 $118.8 $121.9 $126.8 $126.3 $127.1Tier 1
Common $54.2 $54.2 $43.7 $22.9 $22.1 $27.4 $90.3 $104.6
TCE $52 1 $52 8 $45 7 $31 1 $30 9 $40 0 $102 3 $118 2TCE $52.1 $52.8 $45.7 $31.1 $30.9 $40.0 $102.3 $118.2
(1) Tier 1 Common and Tangible Common Equity are non-GAAP financial measures. Please see slide 40 of Citigroup’s 4Q’09 quarterly earnings presentation for additional information on these metrics.
(2) Preliminary. Based on information available as of December 31, 2009, on a pro forma basis the adoption of FAS 166/167 is expected to reduce 4Q’09 Tier 1 Capital by ~143 basis points, Total Capital by ~145 basis points, and Tier 1 Common by ~140 basis points. However, the planned $2B of TruPS issuance in the 1Q’10 will offset the decrease to Tier 1 Capital by ~20 basis points, Total Capital by ~20 basis points, and Tier 1 Common by ~2 basis points. 16
Summary
Some Signs of Credit Stabilization Earnings Potential
Continuing Deposit Growth
Loan & Asset ReductionsRobust Structural LiquidityLoan & Asset Reductions
Largely Pre-Funded, Modest Re-Issuance Needs
q y
Lower Proportion ofRe-Issuance NeedsTender offer to retire generally older vintage debt nearing maturity
Lower Proportion of Wholesale Funding Over Time
nearing maturity
Raised Capital, Repaid $20B of TARP
Strong Capital Base$20B of TARP
17
John GerspachChief Financial OfficerChief Financial Officer
Eric AboafTreasurerTreasurer
January 21 2010January 21, 2010
Certain statements in this document are “forward-looking Certain statements in this document are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on
management’s current expectations and are subject to uncertainty
and changes in circumstances. Actual results may differ materially
management’s current expectations and are subject to uncertainty
and changes in circumstances. Actual results may differ materially g y y
from those included in these statements due to a variety of factors.
More information about these factors is contained in Citigroup’s
from those included in these statements due to a variety of factors.
More information about these factors is contained in Citigroup’s More information about these factors is contained in Citigroup s
filings with the U.S. Securities and Exchange Commission.
g p
filings with the U.S. Securities and Exchange Commission.
Related Documents
